Good morning, and welcome to Lazard's Second Quarter 2025 Earnings Conference Call. This call is being recorded. At this time, I will turn the call over to Alexandra Deignan, Lazard's Head of Investor Relations and Treasury. Please go ahead.

Thank you, Angela. Good morning, and welcome to Lazard's earnings call for the second quarter and first half of 2025. I'm Alexandra Deignan, Head of Investor Relations and Treasury. In addition to today's audio comments, we have posted our earnings release on our website. A replay of this call will also be available on our website later today. Before we begin, let me remind you that we may make forward-looking statements about our business and performance. There are important factors that could cause our actual results, level of activity, performance, achievements or other events to differ materially from those expressed or implied by the forward-looking statements, including, but not limited to, those factors discussed in the company's SEC filings which you can access on our website. Lazard assumes no responsibility for the accuracy or completeness of these forward-looking statements and assumes no duty to update them. Today's discussion also includes certain non-GAAP financial measures that we believe are meaningful when evaluating the company's performance. A reconciliation of these non-GAAP financial measures to the comparable GAAP measures is provided in our earnings release and investor presentation. Hosting our call today are Peter Orszag, Lazard's Chief Executive Officer and Chairman; and Mary Betsch, Lazard's Chief Financial Officer. After our prepared remarks, Peter and Mary Ann will be joined by Evan Russo, Chief Executive Officer of Asset Management as they open the call for questions. Now I'll turn the call over to Peter.

Thank you, Ale, and good morning to everyone joining today's call. We are pleased to report strong performance and results with total firm-wide adjusted net revenue of $1.4 billion for the first half of the year. Financial Advisory achieved a record first half of the year with adjusted net revenue of $861 million. Advisory revenue this year has demonstrated the geographic and product diversity of our business. Results represent the overall strength of Lazard's team and brand, which includes record revenue in France and Germany for the first half of the year. Our performance reflects a global business that also extends well beyond our long-standing strength in strategic M&A with expanded connectivity to private capital and record revenue in our fundraising business year-to-date. Over the past 12 months, revenue associated with private capital has been over 40% of total Financial Advisory revenue, reflecting our increased emphasis on this business and hiring over time. Asset Management continued to deliver solid results with adjusted net revenue of $533 million for the first half of the year. As we have previously stated, we see this year as an inflection point for our asset management business. The second quarter reflects solid progress towards our goal of more balanced flows with positive net flows in the quarter, record gross inflows for the first half of the year and AUM increasing 10% year-to-date. This progress is a result of strong investment performance, efforts to better focus our sales and distribution on core products and strategies and more favorable market conditions for our global strategies. Our success in driving positive net inflows has been achieved while also continuing to win new mandates. And as a result, our current one but not yet funded mandates total is even higher than the elevated level at the beginning of the year. Overall, we continue to see robust client engagement across both of our businesses as corporate and investment leaders move beyond the watchful waiting mindset of the previous quarter and grow more comfortable making decisions in the current environment. I'll share more on our outlook shortly. But first, let me turn the call over to Mary Ann to provide further details on the quarter's results.

Thank you, Peter. Today, we reported second quarter firm-wide adjusted net revenue of $770 million, up 12% from the same time last year. The increase in firm-wide revenue was driven by our Financial Advisory business. Financial Advisory adjusted net revenue was a record $491 million for the second quarter, up 20% from a year ago. Our banking teams performed well across the firm with Lazard participating in a number of marquee transactions during the second quarter. Completed transactions include CD&R's acquisition of a controlling 50% stake in Sanofi's consumer health unit and Roquette Frères' acquisition of IFF Pharma Solutions. In addition, recently announced transactions include Ferrero’s International's agreement to acquire WK Kellogg Co., Assura's recommended combination with Primary Health Properties, and L’Oréal's agreement to acquire Color Wow. In addition, corporate restructuring assignments include company roles with Solo Brands and Wilbur Ellis and creditor roles involving Franchise Group, Saks Global and Southern Water. We also engaged in several private equity assignments, including advising Accel-KKR, Hidden Harbor Partners, and IDG Capital on continuation funds, advising Mainsail Partners on the closing of its Fund VII, and advising on capital structure and executing debt raises for ZF Friedrichshafen, NeXtWind, and iFIT Health and Fitness. Turning to Asset Management. For the second quarter, adjusted net revenue was $268 million, up 1% compared to the second quarter last year and up 2% on a sequential basis. Management fees for the second quarter increased 1% compared to the second quarter last year, with lower average AUM more than offset by higher average fees. Average AUM for the second quarter of $239 billion was 3% lower than the second quarter of 2024 and up 3% on a sequential basis. As of June 30, we reported AUM of $248 billion, 2% higher than June 2024 and 9% higher than March 2025. During the quarter, we had market appreciation of $11.9 billion for an exchange appreciation of $8.4 billion and net inflows of $700 million. We see ongoing client engagement across our investment platforms, particularly with our global international emerging markets and quantitative strategies. Illustrative examples of new mandates include $1 billion from a U.S. public pension into Global Equity Advantage, a $650 million win from a Nordic client for Japanese equities, $600 million from a Korean institution into emerging markets equities, and $500 million into international quality growth from a large U.S. retirement provider. Now turning to expenses. For the second quarter of 2025, our adjusted compensation expense was $504 million resulting in a ratio of 65.5% compared to 66% for the second quarter a year ago. Our adjusted non-compensation expense for the second quarter was $157 million equating to a ratio of 20.4% compared to 21.7% for the second quarter last year. While remaining focused on expense management, we continue to invest in the business to support our long-term growth, including successful recruiting efforts to expand our team of Financial Advisory managing directors and the build-out of our ETF business and asset management. Shifting to taxes. Our adjusted effective tax rate for the second quarter was 36.5% compared to 14% for the second quarter of 2024. We currently expect our full year 2025 effective tax rate to be in the mid-20% range. Turning to capital allocation, in the second quarter of 2025, we returned $60 million to shareholders including a quarterly dividend of $47 million. In addition, yesterday, we declared a quarterly dividend of $0.50 per share. Now I'll turn the call back to Peter.

Thank you, Mary Ann. Regarding the M&A outlook, we expect progress will not be linear. However, if the remaining tariff issues are resolved as expected in the coming weeks, we anticipate a significantly improving environment for Financial Advisory activity. Our discussions with corporate strategics are expanding, corporate balance sheets remain strong, and clients are adapting to changing trade policies. While there are risks due to increased unpredictability, the financing markets are generally favorable. Factors such as technology, generative AI, the energy transition, the biotech revolution, and changes in global supply chains continue to act as supportive trends for client activity. Looking forward, we believe private equity will play a more prominent role in M&A. Lazard is well-positioned to benefit from this, reflecting our ongoing investments in private capital coverage. Client engagement is strong across our global offices, particularly in fundraising and liability management, aided by our capability to offer innovative solutions in both public and private markets. Additionally, our talent pool is growing, attracting senior bankers who appreciate our strong culture, global presence, and the momentum of our long-term growth strategy. So far in 2025, we have hired 14 Financial Advisory managing directors, and we are on track to meet or exceed our goal of adding 10 to 15 net financial advisors per year by 2030. Recent hires in our consumer and retail, health care, and power and energy infrastructure groups are already enhancing our performance and creating new client business. In summary, an improving environment, along with our enhanced connections to private capital, progress in hiring, and Lazard’s distinctive capability to combine business advice with geopolitical insights, all contribute to sustained momentum in our Advisory business. Now, shifting to Asset Management, our heightened focus on sales and distribution, improvements to our investment platform, and the recruitment of new talent over the past few years are yielding results, demonstrated by record gross inflows in the first half of the year. We expect our business to gain even more if investor preferences shift away from the United States, given our broad array of global, international, and emerging market strategies. Despite strong gross inflows year-to-date, ongoing sales efforts have successfully replenished our won but not yet funded mandates. In the second quarter, we launched our first active ETF product set in the U.S., consisting of Japanese equity, equity megatrends, next-gen technologies, and international dynamic equity ETFs, with more ETFs scheduled for launch later this year. Our progress towards long-term goals is supported by our ability to deliver Lazard’s top-tier strategies in new formats that meet client demands. Beyond developing products, we aim to generate alpha by leveraging top market and research insights. To support this initiative, last month, we welcomed Eric Van Nostrand as the Global Head of Markets and Chief Economist at Lazard Asset Management. Across the firm, our commitment to assist clients in navigating a complex economic and geopolitical landscape has led to another strong quarter and a successful first half of the year. We continue to advance our Lazard 2030 plan, with our geographic and product diversification and overall firm momentum positioning us well for a more positive business environment. Now we will open the call to questions.

We'll take our first question from Devin Ryan with Citizens JMP.

I want to come back to some of the commentary just on the advisory outlook and good to hear about the growth in mandates from the beginning of the year. Just want to get maybe a little bit just more texture around the trajectory of recovery that you're seeing in the business? And just whether we're back to maybe the same level of enthusiasm as where the year started. It seems like we maybe lost a month or two of the actual year. But are we kind of back on track here? Or is there still some lingering uncertainty on topics like tariffs still weighing on sentiment in pockets? And so you would characterize as maybe not quite as robust as you were hoping coming into the year.

I have three comments to make. First, before discussing the M&A market, I want to highlight our ongoing efforts to diversify our business model in the advisory sector. Our current business mix is approximately 60% M&A and 40% non-M&A, and I expect this will continue to evolve as we expand our range of products and services beyond our established strength in strategic M&A. Second, I believe the Davos consensus at the start of the year was overly optimistic. However, I now see a more constructive environment emerging. There are strong fundamental drivers for M&A activity, particularly around innovation and technology, as well as increasing returns to scale in several industries. While we've faced various headwinds recently, such as tariff uncertainties, I believe these issues are likely to stabilize in a way that aligns with market expectations. Additionally, the regulatory environment was initially perceived as too favorable, but we always expected some level of scrutiny, particularly with antitrust considerations. We've noticed an acceleration in the average time to close M&A deals recently, indicating ongoing changes in that regulatory landscape. Regarding financing, while the IPO market remains somewhat constrained, other financing avenues have shown significant improvements in recent months. When you combine these factors, along with the desire of many Boards and C-suite executives to respond to emerging trends, we are experiencing an increase in discussions around potential deals. Although there may be some uncertainty in the world, leadership teams are motivated to take action regardless. Finally, we maintain a strong presence in both the U.S. and Europe. This quarter, we observed a slight uptick in European activity, which may be balanced out by a resurgence in U.S. activity as the year progresses. Most of my comments tend to lean toward the U.S. M&A market.

Excellent color. Appreciate it. And maybe just to switch gears to the Asset Management business and touch on the net inflows which we're going to see, it sounds like a combination of both product and distribution, and you've made some good moves on establishing the right products. But on distribution, specifically, can you just talk a little bit more functionally, some of the things you've put in place to accelerate distribution momentum, what's working there? What changes have been made? And then just interconnected question, just how that unfunded mandate backlog has trended just after the really nice June there, if there's any order of magnitude you can give there on how that's backfilling?

Sure. Regarding the second question, I mentioned that our performance is better than the elevated level we saw at the start of the year. While we don't plan to provide regular numerical updates, we did share an initial figure at the beginning of the year, and I’ve indicated that our current performance exceeds that. This is encouraging as it shows that our improvements in flows aren’t compromising the available resources for future growth. Instead, it reflects changes in our operations and what our clients are seeking, which appears to be more sustainable. In terms of our recent efforts, I would highlight two main aspects. First, over the past couple of years, we’ve made changes to our sales and distribution teams both in the U.S. and globally. It often takes time for team members to ramp up their effectiveness and adjust to a new platform, and we’re starting to see that progress. Additionally, I spoke about increased clarity and accountability. Towards the end of last year and the beginning of this year, we set specific goals for our teams regarding products and strategies tailored to particular clients, and we've been committed to meeting those targets, which is yielding positive results. Lastly, earlier this year we discussed the strong investment performance we’ve achieved and the outstanding investment teams we have. We are now witnessing a trend of net inflows into several areas with solid performance such as emerging market equity, global equity, quantitative equity, and Japanese equity. It's important to note that these inflows are concentrated in products and strategies that have excelled. Furthermore, much of what has occurred so far doesn’t fully reflect the ongoing shift in investor sentiment away from U.S. equities. If this trend continues, which seems likely, it could provide an additional boost to our Asset Management business.

We will take our next question from Ryan Kenny with Morgan Stanley.

Just want to square the comments on the significantly improving advisory outlook. There's been some upbeat commentary and the comp ratio is flat sequentially at 65.5%. So any thoughts around timing to hit your goal comp ratio of 60% or below and with deal conditions quickly improving, can you get there sooner rather than later?

Certainly. I want to make a couple of points. While I mentioned that we are significantly improving, I also acknowledged that progress won't be uniform. We are cautious about the variations that can occur from quarter to quarter due to the unpredictable nature of transactions in this business. That’s why we kept our comp ratio flat this quarter; we believe it's the most prudent approach. The final comp ratio will depend on both market conditions and our performance, as well as our hiring strategy. I indicated that we could reach or exceed our target of adding 10 to 15 net Managing Directors per year by 2030. This strategy is based on our belief that these new hires will drive additional revenue and productivity over time. We are enthusiastic about the caliber of talent we are bringing in, which will also impact the comp ratio. As for reaching our goal of a 60% comp ratio, that will hinge on our performance. I won’t provide a specific timeline but I want to emphasize it remains our objective, and our desired outcome is evident. We need to focus on increasing productivity, which influences the comp ratio since much of our operating leverage on the Financial Advisory side comes from the relatively fixed costs associated with non-Managing Directors. As we enhance MD productivity, it significantly benefits the non-MD compensation pool in relation to revenue. It's also crucial that we hire the right individuals, and we are optimistic about that. Furthermore, we must carefully consider the balance between compensation and returns for our shareholders. More details will follow, but it’s still early in the year and we need to monitor how things evolve. We are observing an increasingly positive environment, but recognizing it and actually experiencing it are quite different matters.

And on the non-MD piece, how do you think about associate headcount? Are you rightsized to handle the volume coming your way? Or do you see yourself doing more hiring there?

I think we are in a good place with regard to our non-MD ranks. We actually have had an increase in the so-called TA, the total associate equivalent ratio to each MD over the past year or two. So we've got capacity to meet, I don't want to overstate the case because our people obviously work hard, but we do have the capacity to meet an increasingly constructive environment.

We'll take our next question from Alex Bond with KBW.

So just wanted to start on the M&A backdrop in Europe as it relates to the U.S. And I'm just curious if you could provide a little bit more color as to your feeling relating to sentiment in terms of the difference between what we're seeing in Europe and the U.S. currently. It looks like EU announcements at the industry level didn't rebound to the same degree in May, June as they did in the U.S. So just curious as to what you're hearing in the market currently.

Certainly. One of the advantages of our increasingly diversified business model is our ability to adapt to opportunities that arise, especially in the first half of the year, where we saw more activity in Europe. It's encouraging to have a well-established presence there. Most of the activity we are observing in Europe is largely within Europe itself, rather than involving the U.S. Additionally, there is considerable non-M&A activity originating from Europe that is also noteworthy. It's important to mention that we are actively hiring in Europe, including adding a senior person to our financial sponsors coverage in the U.K. We are also opening a new office in Northern Europe and have made additional hires in London for insurance coverage. Our German team has strengthened with a fantastic new debt advisory team. Overall, we are enhancing our platform in Europe with diverse and highly skilled professionals. Regarding the latter part of the year, U.S. activity is rebounding, creating a more favorable environment. We anticipate that the second half of the year will see a significant increase in activity compared to our year-to-date experiences, based on our ongoing discussions and new developments. We also expect to see sustained high levels of activity from Europe. For instance, we recently successfully defended Banco BPM against a takeover attempt from UniCredit, where we provided advisory services. There is ongoing activity in Europe alongside what we see in the U.S.

Great. No, that's helpful color. And then maybe as a follow-up, just to quickly go back to the hiring pipeline. You've announced a strong number of senior hires here year-to-date and you touched on this briefly earlier, but curious as to if you've seen any shift in the market there as we've seen activity rebound over the last couple of months? And I guess, just broadly on your outlook for hiring through year-end here?

I’m not sure what you were anticipating regarding the shift, but I can say that we have been performing exceptionally well in our lateral recruiting efforts. I'm very satisfied with the work Ray McGuire, our President, has been leading in this area. The quality of the talent we are attracting is very high, and we are successfully competing against others for candidates. We're happy with our success rate while paying competitively without overpaying. This success can be attributed to several attractive structural features at Lazard, including our brand, our reputation for quality content, and the positive energy surrounding our renewed ambitions for our Lazard 2030 goals. Our strong culture, which balances commercial and collegial aspects, is also crucial in attracting top talent. Additionally, we benefit from stable leadership, a clear strategy, and a well-established presence in both North America and Europe, which is vital in various sectors. We are very pleased with our position in a competitive labor market.

We'll take our next question from James Mitchell with Seaport Global Securities.

Maybe Peter, you just getting back to the flow picture in Asset Management, record gross flows, great to eke out some net inflows, but still obviously implying some pretty high gross outflows. You talked a little bit about not seeing the benefits of the shift in the environment. What is holding people back? Why is there still relatively high attrition if the environment for non-U.S. equities is getting better and likely to continue to do so? It just seems like at least attrition should slow.

I want to mention a few points, and perhaps Evan can elaborate. First, we always see both gross inflows and gross outflows, so it's normal to have outflows as investment preferences change. The marketplace naturally experiences some churn, which is to be expected. Highlighting our record gross inflows is important because we have many appealing products and strategies that are in high demand, even before considering the ongoing shift in investor preferences. Regarding the timeline, since our business is largely institutional, processes around making investment decisions can be slower. High-frequency movements aren't typical in this space, so it's understandable that there are some delays. I want to point out that earlier this year, I faced skepticism when I suggested that we saw this year as a turning point with a goal of flat flows. However, from our conversations with institutional clients, we noticed a change taking place. We had anticipated continued outflows from certain sub-advised accounts, which fit into the overall picture. Notably, the net inflow in the second quarter occurred despite a significant outflow from a sub-advised account, indicating a shift towards other products and strategies I've mentioned, such as global quantitative and Japan, while seeing some movement away from U.S. sub-advised options—something we expected based on client feedback. We set ambitious targets for our sales team, and I believe we are making strong progress towards those goals. I appreciate the skepticism earlier in the year as it drives us to perform even better. We are pleased with the progress being made, and the positive net flows represent a significant step forward. This isn't entirely surprising to us, as we recognized these trends earlier in the year. Evan, do you have anything to add?

Yes, sure. I think you summarized it well. I think the only thing I'd add, Jim, is look, we're seeing broad-based success in our new flows. So it's really broadly defined across channels. So whether it's institutional or intermediary. It's across geography. So we're seeing tremendous success in Asia Pacific clientele, looking to put new capital to work as well as in Europe and across products. So it's not just one single product as Peter pointed out earlier, so it's across global equities and international products as well, Japan, quant, and even some in the emerging markets. So in terms of how the reallocation, the shifting is happening, I mean, as Peter said, institutional trends take some more time. So it's still early. We're starting to see some of the early adopters, but there are definitely more green shoots and early adopters, and we're seeing definitely more interest across that reallocation trade that we've been talking about for a little bit. That started with some of the client discussions and early adopters as we said at the end of last year leading into this year, and that trend continues. So so far, I think the momentum, clearly, we're trending better than past years and calling out sort of the record gross flows for the first half of the year shows the momentum we have in bringing new clients as well as new mandates, bringing new mandates to the product set that we have.

Okay. That's great insight, and I apologize for the recent focus on immediate results. Perhaps you could elaborate on AI. Peter, you've been more outspoken than others regarding the potential of AI in your business. Can you discuss what benefits you see and any progress you're noticing in terms of efficiency?

Yes. I believe the next couple of years will be transformative for both of our businesses and the technology we use. As I reflect on my nearly two years in this role, I feel very positive about the progress we've made. One unexpected development has been the rapid advancement of AI, which has exceeded our expectations. We're using AI tools internally to enhance our offerings for clients and improve our employees' experiences. Additionally, we can all see remarkable advancements in commercially available tools in our everyday lives. In terms of our approach to AI, we have four main focus areas. First, we aim to be at the forefront of technology, providing our bankers and investment professionals on the asset side with cutting-edge tools. We're continuously exploring the expanding possibilities in this area. Second, we are undergoing a cultural shift. I recently welcomed our new analyst and highlighted the importance of adapting to both traditional and new methods. We want our new analysts and associates to be versatile, breaking free from outdated practices that may no longer be efficient. The third focus is on digitizing the knowledge and insights that our employees possess. By doing this, we can provide AI tools with valuable information to work with. Finally, it's important to note that as technology evolves, the significance of human relationships and deep client connections will only grow. This means more engagement and in-depth discussions with clients, as those trusted relationships are vital in a world increasingly influenced by AI. Overall, we have many initiatives underway, and I am genuinely excited about the transformational opportunities ahead for both of our businesses.

We'll take our next question from James Yaro with Goldman Sachs.

So you mentioned, Peter, that private equity will comprise an increasing portion of M&A. But recently, strategic M&A has outperformed sponsor M&A again this year. Could you just help us think through when the frequently and much-hyped sponsor recovery will take off?

Sure. Before I continue, I want to highlight that over 40% of our advisory revenue is now generated from private capital. Although the M&A segment has been somewhat quiet, we have numerous interactions with private capital, including fundraising, restructuring, and liability management, along with our Lazard Capital Solutions team. As a result, we are experiencing a considerable rise in revenue from private capital despite the subdued M&A activity. Additionally, we anticipate an increase in M&A activity from this sector because limited partners have seen lower cash distributions than expected for several years, creating mounting pressure. This pressure has also accelerated our secondaries business within our PCA fundraising efforts. However, the environment remains challenging. The lack of higher cash distributions from the M&A channel is linked to some of the previous headwinds I mentioned, but many of these issues are beginning to resolve, particularly in the regulatory and tariff environments. Although the IPO market may not be fully ready yet, we expect improvements. As these barriers to M&A activity from private equity diminish, coupled with the ongoing pressure from limited partners, we believe the environment will shift.

Okay. Excellent. That's very, very clear. Just two quick Asset Management questions here. Firstly, to clarify a previous point you made, are you now committing to net 0 flows? And I guess, how should we think about this over an annual basis or some other period? Secondly, could you just speak to the impact of recent inflows on the Asset Management fee rate and the mix shift away from sub-advised mandates? Should we expect the fee rate to potentially tick down from this quarter's level? And just how to think about the cadence? I know there's a lot there.

Sure. First, I'm not entirely sure what you mean by committing to. We previously stated that flat flows were a stretch goal at the beginning of the year. I still believe it's an attainable stretch goal for the entire year. We'll see how it unfolds. However, the flow situation has improved significantly compared to 2024 despite some initial skepticism about that stretch goal. I want to emphasize that we are concentrating less on immediate outcomes and more on the underlying actions that lead to positive results, which you can see reflected in our year-to-date results and in the second quarter. Regarding the fee rate, it actually saw a slight increase from quarter to quarter and a bit more year over year. The sub-advised accounts, as I mentioned earlier this year, represent a significant portion of our assets under management, though they account for a smaller portion of our total asset revenue—under 5%. This is because they are large, and typically, there is an inverse relationship between the size of the mandate and the fee rate from a single client. Therefore, these lower fee rate assets constitute a larger share of AUM than revenue. Given that, if we experience neutral overall flows with outflows from sub-advised accounts and inflows into other products, you might expect at least stability and possibly an increase in the average fee rate as a result.

Very clear. Just a quick last one on the non-comp, good non-comp discipline in the quarter. Could you just speak to the non-comp growth trajectory from here?

Yes, I'll take that one, James. So I had previously said that I expected mid-single-digit increases in non-comp on a dollar basis for the year. Since then, we've seen some upward pressure, a couple of points from FX rates, and then we've also seen business development trending up as well as continued investments in technology. So now I'd say probably expect more like high single digit for the year.

We'll take our last question from Brendan O'Brien with Wolfe Research.

I guess to start, the commentary on the mix of the advisory line was helpful and insightful. So thank you for providing that. But I just wanted to get a sense as to how that mix compares today relative to last year. And within those non-M&A businesses, how is the contribution from those different line items evolved?

I would say compared to last year, we have a slightly higher share in non-M&A activities, with the mix being approximately 60-40. There has been a small percentage point shift where the non-M&A segment has increased a bit, while the M&A segment has taken a slightly smaller portion of the total. Within the non-M&A area, restructuring and liability management have seen a significant rise, particularly liability management, which now constitutes nearly all of it. As I noted earlier, we achieved a record first half in our PCA business, which focuses on fundraising, and this part primarily contributes to the secondary business, making up about 60% or roughly two-thirds of the overall business. Additionally, our Capital Solutions Group is experiencing notable growth, which is encouraging. Overall, we have been expanding our products and strategies to diversify our offerings, making us increasingly well diversified geographically and across the products we provide to clients. This applies to advisory services, and we also benefit from the diversification that comes with our asset business.

That's helpful color. And just drilling down on the restructuring part of the business, in your comments around the M&A outlook, you indicated that conditions are improving, corporate balance sheets are strong. But obviously, at the same time, it sounds like your liability management practice continues to see strong momentum. So just trying to square those two like the push-pull between those two businesses and how you expect restructuring and liability management activity to trajectory throughout the rest of this year and into next?

Yes. Even in a generally positive environment, some companies or sectors may face difficulties. It's not unexpected that as we focus more on liability management, which is currently the majority of our activity, both aspects can coexist. Additionally, in our business, we've not only undergone a leadership change a few years ago, but we've also diversified beyond just restructuring into liability management while balancing our efforts between creditors and debtors. If we look back five to ten years, our business was likely over 90% debtor-focused. Today, it’s more like a 60-40 split between debtors and creditors. I've been emphasizing this 60-40 split in various contexts including M&A and different company types across locations. We see the potential to move towards a more balanced 50-50 split, which would represent a larger share of an expanding market. This excites us for future growth opportunities, which is why we are actively seeking out new, high-quality talent as we see significant potential ahead.

This now concludes Lazard's Second Quarter 2025 Earnings Conference Call.