good morning and welcome to lazard's first quarter 2026 earnings conference call this call is being recorded currently all participants are in a listen only mode following the remarks we will conduct a question and answer session instructions will be provided at that time if anyone should require assistance during the call please press the star key followed by zero on your telephone keypad At this time, I will turn the call over to Alexandra Degnan, Lazard's Head of Investor Relations and Treasury. Please go ahead. ALEXANDRA Degnan, Thank you, Chelsea.

Good morning, everyone, and welcome to Lazard's earnings call for the first quarter of 2026. I'm Alexandra Degnan, Head of Investor Relations and Treasury. In addition to today's audio comments, we've posted our earnings release on our website. A replay of this call will also be available on our website later today. 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. Lizard assumes no responsibility for the accuracy or completeness of these forward-looking statements assumes no duty to update them. Please also note that unless we state otherwise, all financial measures we discussed today are non-GAAP adjusted financial measures. We believe these non-GAAP financial measures are meaningful when evaluating the company's performance. The reconciliation of these non-GAAP financial measures to the comparable GAAP measure is provided in our earnings release and investor presentation. Posting our call today are Peter Orszag, Lizard's Chief Executive Officer and Chairman, and Tracy Farr, Lizard's Chief Financial Officer. After our prepared remarks, Chris Hogban, Chief Executive Officer of Asset Management, will join us as we open the call for questions. I'll now turn the call over to Peter.

Peter Hogban- Thank you, Allie, and good morning to everyone.

Before turning to our first quarter results and outlook for the year, I want to start

with our announcement of the acquisition of Campbell Lutyens and the future establishment of Lazard CL, a new private capital advisory unit within Lazard that will serve as our third global business closely coordinated with our world-class M&A and other advisory practices. This transaction underscores how Lazard is building on its core advisory franchise while both diversifying our business model and accelerating our growth. Gamble Lutyens is a premier global private markets advisor focused on fund placement, secondary advisory, and GP capital advisory services. Along with our existing PCA group, the transaction combines two highly complementary advisory platforms that will create the leading primary and secondary advisory business globally with approximately 500 million dollars in anticipated combined 2027 revenue the acquisition marks an important milestone on the path toward lazard 2030 and an exciting avenue for additional growth lazard 2030 is a multi-year plan to build a more productive resilient growth-oriented firm our focus is on enhancing our long-standing strength in mna while also building leading platforms and restructuring and liability management, capital solutions, and private capital advisory. Our recent investments have expanded the solutions we provide for clients and diversified our revenue mix. Revenue related to private capital connectivity has increased from approximately 25% of total advisory revenue in 2019 to 40% today. Upon closing the Campbell-Washins acquisition, we will achieve our 2030 target of approximately 50% percent, even while delivering total revenue growth. The acquisition of Campbell Elections and the establishment of Lizard CL strengthens our ability to deliver for clients at a time when fundraising is increasingly competitive and liquidity solutions are more complex. Operating across all major alternative asset classes and in all major global markets, Lizard CL will provide an unparalleled platform for independent differentiated advice that meets the evolving needs of institutional investors, financial sponsors, and their portfolio companies. By pairing the combined proprietary data sets of these two businesses with our AI capabilities, we will deliver deeper insights for clients while advancing our goal of becoming the leading AI-enabled independent financial firm. We view this acquisition as strategically disciplined, financially accretive, and culturally aligned. We share a commercial mindset, collegial approach, and unwavering commitment to our clients. With Lazard's heritage in Europe, including the U.K., where we have had a significant presence for well over a century, we also have a shared respect for Campbell Lutchen's roots and for the importance of preserving local identity within a global firm. This step highlights our further investment in the U.K. and in growth across our global franchise. Taking together this transaction reflects how we are positioning Lazard to lead across both public and private markets with exceptional advisory and asset management capabilities while remaining anchored in the strategic advisory work that defines our firm. We anticipate the transaction closing before the end of the calendar year, and we look forward to welcoming the Campbell Lessons team to Lazard. Now turning to the quarter, firm-wide adjusted net revenue was $673 million, up 5% compared to one year ago. In financial advisory, our outlook is optimistic despite geopolitical uncertainty with conditions depending in part on the path forward in the Middle East. Client engagement remains very active and the pace of client interactions continues to accelerate. Total conflict clearances are up significantly, reinforcing our confidence in our deal outlook. As one example, conflict clearances for deals above $5 billion are up 50% year over year. The broader underlying dynamics supporting activity also reinforce our constructive outlook. Companies continue to look to achieve scale and focus amid rapid technological change in a regulatory environment that is constructive. Dispersion in corporate performance continues to drive elevated restructuring and liability management alongside M&A. We anticipate ongoing strength in fundraising and the potential for increased private equity activity. These dynamics align with our existing financial advisory and future Blizzard CL businesses, providing multiple and complementary levers for revenue growth. Financial advisory activity can admittedly be uneven from quarter to quarter, and during the first quarter we had several transactions moved to later in the year. As a result, revenue from this business was not as strong as we anticipate the rest of the year will be. Most robust growth in restructuring and liability management and private capital advisory along with solid M&A performance in Europe supported overall results and underscored the benefit of our diversified model. Looking beyond 2026 to the next phase of Lazard 2030, retaining, promoting, and recruiting top talent remains a core component of our long-term growth strategy. We more than exceeded our goal of expanding our financial advisory MD group by 10 to 15 additions from the first quarter of each year, with 28 net additions for 2025. Our recruiting pipeline is strong, and we remain opportunistic about adding new MDs in 2026, while we also focus on integrating Campbell Lutyens following the transactions close. In asset management, we delivered net inflows of $9 billion this quarter, the highest level of quarterly net flows in almost 20 years. The momentum we see in our results underscores that our strategy is successfully pivoting the business where active asset management provides an advantage. While our focus on areas of the market where information is imperfect, with our focus, sorry, on areas of the market where information is imperfect and where our systems and research carry a distinct edge, including in quantitative strategies and emerging markets, we continue to see client demand and grow. Even with significant inflows for the quarter, our one but not yet funded pipeline remains strong. While the environment remains uncertain, our business is well positioned for the year ahead as market volatility creates more opportunities for active managers and global diversification is firmly back on the agenda for investors. We continue to believe 2026 will be a year in which investors increasingly reallocate towards emerging and international markets, which is where Lazard's presence and capabilities are particularly strong. With a more diversified platform, best-in-class research and investment processes, enhanced global distribution strategy, and new leadership, our asset management business is well-equipped to capture opportunities aligned with client demand. Client demand continues to grow for independent, differentiated advice and investment solutions grounded in contextual alpha, the broad insight and judgment needed to navigate complex macroeconomic and geopolitical dynamics. And that is what Lazard excels at delivering. As we reflected in our annual shareholder letter published last month, Lazard today is a structurally and culturally different organization, more commercial, more globally connected across public and private markets, and better positioned to deliver long-term growth beyond traditional cycles. Now, let me turn the call over to Tracy to discuss our financial results.

TRACY CURTIS- Thank you, Peter. Financial advisory adjusted net revenue was $356 million for the first quarter of 2026, 4 percent lower than the prior year. Building on our momentum in private capital advisory, recent assignments include advising Felsteria's capital partners, confirming capital on continuation funds, and advising Nova Infrastructure on the raise of Infrastructure Fund II. Rather reflecting the diversification of our franchise, liability management and restructuring assignments include debtor roles with xerox holdings and creditor roles involving anthology and dish. Demonstrating global reach with complex assignments, we completed transactions with current Dr. Pepper's $23 billion acquisition plan. Subsequent separation into recently announced transactions include Zurich Insurance Group on its 8.2 billion pound recommended cash. Turning to asset management, adjusted net revenue was $309 million for the first quarter. This reflected management fees of $296 million for the first quarter, 25 percent higher than the first quarter of 2025, and up 3 percent on a sequential basis. Incentive fees totaled $11 million. As of March 31st, we reported AUM of $259 billion, up slightly compared to year-end, and demonstrating improved net inflows of $94 million, foreign exchange depreciation of $3 billion and divestiture for the first quarter was ongoing demand for our quantity. New mandates and key transactions during the fund was resulted in a $78 million non-cash from our adjusted report. In addition to our organic growth investments, yesterday's announced acquisition of Campbell Elections represents an important step in the accurately accelerating revenues. This front consideration is all stock payments to be $7.7 is brought based at Campbell Elections. So this transaction creates significant balance alignment, which also has the near-term effects of strengthening the balance sheet. Outturning to firm-wide expenses, $71 million. The compensation ratio of suggested non-comp expense was $149 million. Moving operational efficiency and delivering profitable growth, we are committed to achieving efficiency over time. Our adjusted effective earned $174 million to shareholders, including yesterday we declared acquire a Lazard 2030 strategy. where you're building a stronger and more resilient firm. The addition of Campbell Elections and the Cielo is our third ongoing focus on disciplined execution.

Time, if you would like to ask a question, please press star 1 on your telephone keypad. If your question has been answered, you may remove yourself from the queue by pressing star 2. So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. We'll take our first question from Devin Ryan with Citizens Bank. Please go ahead.

Thank you. Good morning. Thanks for taking the question. First question, obviously, appreciate the comp ratio dynamic in the first quarter, just the kind of a math equation. But can you just talk about kind of the full year? Do you think you can drive some improvement there just based on what you're seeing right now in the revenue backdrop, you know, appreciating things can change? And then, you know, bigger picture probably for Tracy, just, you know, as you've been in the seat here for a bit, So are you identifying any opportunities that could maybe drive more leverage as we look out beyond 2026? Thank you.

I think Tracy can take both of us. That's fine. I appreciate the question. So first of all, I'd go to Peter's opening comments around our positive outlook for the year ratios, gain more and more confidence around the revenue projection. There's leverage there. I want to be careful. I mean, your comment is exactly right. effectively a math accrual that you'll see, I think we would still guide you closer to this whole year so that there'll be a higher discipline. Obviously, me being in this role, one of the things that I had stressed that I would focus on was operational efficiency and cost management. I think there's additional ability to be a strong amount of discipline on non-comp already in the first quarter. To your question about just other geographies and businesses, that we have a renewed focus on finding efficiencies there. We've launched a long-dated program to address some of those costs, AI, and other parts of our business. Great. Thanks, Tracy.

And then, Peter, I won't leave it out here. First off, congratulations on the Campbell-Lutchins acquisition seemingly get you in the top couple of firms and private capital advisory. Obviously, they already had a strong business, but this scales that quite a bit. So the question really is Campbell-Lutchins didn't have all the other advisory capabilities that Lazard does and your existing private capital business was pretty integrated with from my sense. So can you just talk about the network effects that you think you can get off of Campbell Lutyens and then also what that could mean for, like, productivity uplift of those partners or just more broadly across the firm as you integrate all those LP and GP relationships with broader Lazard?

Sure. Thanks so much for the question. First, I'd note we believe in, I think, the data show that we're pro forma, the leader, not one of the four Lazard CL post-close. Second, there is a network effect, a flywheel effect in both directions from M&A restructuring and liability management to the fundraising business and vice versa. This is one of the major motivations that Campbell Hutchins had for joining Lazard, which was the recognition that they needed more of those capabilities in order to the fundraising business. Again, this was a big part of the discussion, which is the ways in which there was business flow in both directions. So we're very excited about the opportunities for enhanced productivity from not just the kind of base business, but in a sense referrals in both directions. And this was a core part of the strategic logic of the transaction. In addition to that, I don't want to discount the data piece of this. As you know, really nuanced information and data on both GPs and LPs is difficult for most people to obtain. This combined business will have a data-rich environment that will be coupled with our AI that will help facilitate that flywheel effect that I was mentioning earlier, earlier, in addition to helping on the core primary and secondary fundraising business itself. So there's a lot of opportunities for uplift here.

Thank you. Our next question will come from Alex Bond with KBW. Please go ahead.

Hey, good morning, everyone. Another question on the deal, and congrats there again. Can you almost think about the business mix at Campbell Luchins just in terms of maybe secondary advisory related revenues versus the primaries business relative to your existing in-house units currently and also in a similar sense in a geographical split of their business compared to yours and essentially just trying to determine where do you think their their business will fill in the most white space relative to your existing offerings thank you yeah I appreciate that and

what's what was attractive for us about this transaction is Lego piece nature of in terms of very little along we were weaker and vice versa. In particular, balancing in the secondaries market, for example, GP transactions that are a source of excellence with LP transactions that are on the Campbell-Lutchins side more of the focus. Across asset classes, we're adding complementarity between and then infrastructure and other, for example. And so that's fitting very nicely. And then on the fundraising piece, strengthen North America, strengthen Europe, and in Asia. And so you're just seeing as we went, you know, two or three layers down, ecosystem coming together in a comprehensive way. I think it is exceptional having, you know, potential transactions, the degree to which the pieces fit together to form a coherent whole. We also have some additional information on the mix of activities and what ZARD CL would look like in the supplemental deck that we posted yesterday. Thanks, Peter.

And then maybe for my follow-up, going back to the comp, and I guess we just want to drill down on maybe the impact of last year's above-trend hiring there. hiring there. You obviously added the 28 NMDs last year, well above the 10 to 15 targets that you have out there. But maybe if you could just try to help us quantify maybe how much the hiring last year impacted the comp in 1Q relative to the full year 25 rate, and then also maybe how we should think about the evolved trend hiring last year, maybe trickling through and impacting hiring trends in 2026, if at all. Thank you. Sure. Let me take that question and then

And then Tracy can take, or I'll take that part of the question, and then Tracy can take the kind of, I don't want to call it the mechanical part. I'm not assigning that to you, Tracy, but the calculation part. Obviously, last year we added a lot of talent above our 10 to 15 net ad per year target. We have added some bankers this year, health care services, a good example. We're interviewing others. By the way, I would note, just as an aside, one of the people I interviewed earlier in this week before this transaction was announced was highlighting the importance of the secondaries business to his M&A franchise. So just coming back to the flywheel effect, we think that with Lazard CL, we'll have even expanded ability to bottom line. I think that we will be, you know, within our range this year in terms of net ads rather than above it. So 2025 was an unusual year because we had a lot of talent that we thought was active and valuable. I'd also note just on the timetables here, that also means that if you look back over time at the separations we've done to modernize our culture, and then when the net ads have been, you know, a lot of it is still yet to come. The bankers that we've been hiring ramp up onto our platform, and if you look at the year-by-year net ads and subtractions and then add it one to three years depending on what kind of ramp you want to do, the majority of the productivity gain from the hiring we've done is yet to come.

Yeah, and I think the only thing I'd add to that on the mechanics, I mean, this year. Keep in mind that that still remains what would be effectuated by, for example, a little bit of this mechanically. Maybe what I'd point you up if you were to compare double digits and total adjusted net revenue being up. We'll come from James Yarrow with Goldman Sachs.

Please go ahead. Good morning, and thanks for taking the question, and congrats on the deal. I did want to touch, Peter, on the sponsor's backdrop right now. It remains the weaker part of M&A once again so far this year, you did sound a constructive tone on this part of the market. Maybe you could just expand a little bit on the timing and speed of sponsor M&A recovery and the ingredients associated with that as you look ahead.

Sure. Look, I struck a constructive tone on the market as a whole. I don't think I struck a constructive tone in equity. For example, the conflict clearance is above $5 billion, the rapid growth there, those are almost all, just given the deal size, public less likely. But I agree with you. There's a little bit of waiting for Godot kind of phenomenon where, with regard to private equity activity, we've all been waiting for that moment. I'd say if you listen to the heads of the large alternative asset managers who are going to drive a lot of this activity, they are still saying that 2026 will be the year in which they're going to be selling and buying a lot of firms. So we will see how that plays out. But the other point I wanted to make is that our connectivity to private capital, the reason that our revenue share on the advisory side has gone from, extends well beyond private equity M&A and involves restructuring and liability management engagements with these firms. It involves the private capital advisory business, which is growing rapidly. It involves our Lazard Capital Solutions business. So I think the piece that you're focused on appropriately, I agree with you that we've been waiting for a substantial uptick and to see how the year turns out. We are seeing, you know, a significant number of processes that we're involved in. So that's promising in private equity M&A. And then the second thing I'd say is, again, look to the public comments of the leaders of these firms in terms of what they say they're going to be doing in this calendar. But we don't have to wait to see it actually, you know, manifest itself.

Okay, thanks for the clarification. My apologies for mischaracterizing your comments. maybe just a little bit on asset management here. I was hoping you might be able to expand a little bit on the flow outlook from here. Do you expect to be able to continue at the recent level of inflows? And perhaps if you could also just unpack a little bit the fee rate dynamics in the quarter in asset management and how we should think about the fee rate going forward as well.

Chris Hogman is going to take that first. Thank you for those questions. So, look, on the flows, we obviously enjoyed a very strong first quarter with $9 billion of net inflows. I think that reflects, you know, a deliberate sort of focusing of our distribution, you know, strong investment performance across a number of services, and client demand in areas, you know, where we have very strong offerings. In his remarks, you know, we've seen, you know, clients looking to diversify into international emerging markets and global strategies. And as a reminder, two-thirds of the AUM we manage is non-dollar denominated. So in terms of the flow dynamic going forward, we still have a very strong one-but-not-funded pipeline. We see a lot of commercial activity, but I would not straight line the number from Q1 through the year. In the next couple of months, we might see a little bit more of a moderation in the net flow level. As a reminder, net flows are the difference between two big numbers, gross flows, inflows, and then very strong gross flows. But we still remain very confident that we will deliver on our commitment. We'll come from Vernon Hawken with BMO.

Please go ahead.

Good morning. Thanks for taking my questions. Congrats on the Campbell Legends deal. Could you help us understand the price paid for Campbell Legends? And thanks for the clarity on the equity financing, Tracy. When was the deal price struck? Could you help us understand that, too, as far as the pricing?

Yeah, I can think. Maybe it's just helpful to talk about another half of it.

Thanks for highlighting all that. Another angle that I was interested in pursuing, Tracy, was, you know, the sort of getting an understanding of the price paid on the actual earnings that you. Could you maybe help us understand the earnings that is embedded, you know, either in your 2027 combined density and importantly, you know, what kind of profit margins, CL, anything that we can kind of get a little clarity.

Thank you. Our next question will come from Ryan Kinney with Morgan Stanley. Please go ahead. Hi.

Good morning. Just want to clarify, as you focus on integrating Campbell Lutyens, does it rule out additional M&A near-term in areas like asset management?

I'll take that. The short answer is that I think we've been disciplined in the acquisition targets that we have been looking at. Campbell Lutyens, I think, is right down the fairway in terms of the type of business that we find attractive. It's not, I think I've talked before about avoiding advisory firms that one man dance kind of thing, that where you're putting a premium on something with very little to no terminal value. We will continue to pursue an approach in which we're going to avoid doing that. We were disciplined, you know, obviously we were being pitched a lot of private credit opportunities early in my tenure. We decided not to pursue those in part because we did anticipate that the valuations looked high and we anticipated there might be a wobble in the market at some point, which is exactly what has occurred. That having been said, there may well be teams within asset management that we find interesting, not necessarily major acquisitions. And then the only other thing I'd say is we are taking a very active look at our wealth management opportunities. And we believe that there may be pathways for growth in that arena. So I'll leave it at that, which is on the advisory side, I think we've been pretty clear about visions. And on the asset side of the business, you know, I don't think you should anticipate anything in the traditional asset management space, but we may be, we're looking through the growth opportunities in our wealth management business. And in addition, we're actively always looking at talent and teams in our core asset management business where we believe that it's differentiated. And obviously, one other thing is we look at any opportunity. I just want to emphasize it's got to fit strategically. It's got to fit from a valuation perspective and a shareholder value perspective, and it's to fit culturally. We're really pleased with Campbell Letchins from that perspective, but those are the only transactions that we're going to be doing where you hit all three, and we will continue to be quite disciplined in terms of-

All right. And then separately, Peter, what are your thoughts on the new proposed merger rules in Europe? Is it meaningful to your advisory business there?

It could be. I think, look, the backdrop in Europe is that there are lots of great European companies, but I made, and to some degree, impeded by, you don't have as many frontier firms in Europe as you do in the United States, and so I think, going back to the Draghi report, this was one of the recommendations that was in that report, and so in addition to the potential that there's opportunity created by moving in this direction, I'm also glad that Europe's moving on some of the Draghi recommendations, because I think that's important. Thank you.

Thank you. Our next question will come from Mike Brown with UBS. Please go ahead.

Great. Good morning. Thanks for taking my questions. So, Peter, you noted that several large transactions slipped out of Q1, but the conflict clearance is above $5 billion or up 50% year-over-year. Can you just talk about that pipeline to revenue conversion timing here? Is this potentially coming through QQ, or is it really going to apply kind of a heavy second half skew. And is there risk here that, you know, some of these deals ultimately don't reach the finish line? Just, you know, maybe some color there about kind of what drove that

slippage this quarter. And I think, you know, the short answer is this is not a quarterly business. It's a lumpy business and trend because the quarters can bounce around. That is what we're very excited. Our 2030 plan, all of the indicators that we're tracking to achieve that plan. There's one explanation for the various different slippages. A lot of them are idiosyncratic specific deals or regulatory approvals or what have you. From here and the conflict clearances is I would just underscore that again, which is that no, there is no guarantee that a conflict clearance turns into an announcement and that turns into revenue. But it is encouraging and an indication of the increasing traction that we're getting as a firm. I see this in a more qualitative way in terms of the boardrooms that we're now in, the CEO relationships we now have that did not exist a couple years ago. The frustrating part of this business is that takes a long time to mature, and it takes a long time to convert into revenue. But it's happening, and the conflict clearances, I think, are an indication of that. So I don't want to ask precision on exact conversion timing, but I do want to give some encouragement about the underlying, you know, under-the-surface momentum that the business is creating in terms of relationships and those relationships turning into mandates and then ultimately mandates turning into revenue.

Appreciate the color there. And I just wanted to ask about Campbell here. A lot of good color. I like the way you framed kind of the Lego building blocks here, so it doesn't seem like there's much overlap, but if you were to think about some of the synergies, clearly there's some network effects. You talked a little bit about that. Maybe expand on that a little bit. Is it an opportunity to continue to kind of find ways to get paid more from sponsors if ultimately there's less deal activity coming through? And then maybe on the expense side, is there any opportunities that could come through there? Tracy, maybe touch on any, like, shared services or other expense opportunities here.

What I would say is I do think that there is a benefit to being, actually, even the responses we've gotten over the past 24 hours from some of our major clients, understand how excited they are that we will be able to offer the full suite of services that they may need in primary and secondary with a global fundraising fills in the holes and it's there for, if anything, even more effective. And so encouraging on the additional revenue that will come to the combined business precisely from the combination. And then I've already highlighted the data point. I'd say in private markets, this is particularly important. The more insight you can have across a wider array of private markets participants, the more effective you're going to be for any given client. And then third, I'd say the scale itself opens up, and we'll have more to say about this in the future, but the scale itself opens up a whole array of new opportunities, which I'll leave as vague for right now, but that we're excited about in terms of what we can offer to counterparties and to others associated with Lazard. So more to come on that. And then on the cost side, appreciation in 2027 that Tracy mentioned, you can fill in additional detail, Tracy, does not offend cost synergies. And so we're excited about this transaction even in the absence of that. But obviously, as we move through the integration process, undoubtedly in these sorts of things, as we examine different ways in which we can be more efficient together than we were separately, confidence that there will, you know, those synergies will be possible, it's just that we didn't assume any.

Thanks, Peter. And it's a great question. I think maybe one point I would add on the revenue front, the negotiations that we had with Campbell Legends, keep in mind that this was bilateral negotiation. One of the things that they found very attractive about Lazard itself was in their own revenue pipeline, which obviously we diligence the fair bit, there's a lot of opportunities where they collaborate with partners where there's synergy within our existing business. So I would say that that cost side, you're exactly right. I appreciate you using the shared service concept. As you know, I've shared my views around Legacy Lazard not having kind of a shared service mentality in corporate. Actually, they have a lot of support functions that will complement that scenario. Peter already mentioned the geographical LEGO compatibility with their business in addition to the client and the service offering. There's a geographical from a real estate perspective. That's what I would say is I'd be remiss if I didn't complement the TAT legal and other support.

Thank you. Our next question will come from Daniel Kukaira with Bank of America. Please go ahead.

Hi, good morning.

It came into the year just with a lot of emerging market excitement, but the war on energy price spike has kind of thrown that into question. I was wondering if you could just talk about how these developments have impacted your near-term outlook just for the asset management business. Thank you very much.

Yeah, I mean, it's interesting. If you look through, the flow's picture was actually very consistent, very too much. So we didn't, as the Iran conflict kicked off, we didn't really see any impact. As a reminder, you know, institutional investors tend to be a little bit longer term. And if anything, CME versus market movement hasn't changed much.

Thank you.

Thank you. Our next question will come from Brendan O'Brien with Wolf Research. Please go ahead.

Good morning, and thanks for taking my questions. As a start, you know, there's been a lot of noise on the private credit space at the moment where there's growing concerns on the outlook for credit performance just given their greater exposure to software companies. Just wanted to get a sense as to whether you're seeing any signs of building stress in both sponsored portfolio companies broadly as well as within their software holdings specifically. And just as we think through the timing of this opportunity, is this more of a 2026 kind of fee event or more of a long-term one in your view? And just how does the private credit loans or the fact that it will be more private credit concentrated potentially impact the opportunity from a liability management versus Chapter 11 perspective?

I'll take a little bit of that and then Tracy, you can come in also. Look, I'd say the following. In the parts of our business that deal with sponsors who are in the software, it's not universal, it's a bit idiosyncratic, firm by firm, but that is a very, very small advisory practice, and in general, I'd say the private credit challenges are concentrated, and they're also, I'd say, more salient or more severe, if you will, among alternative asset managers or private credit players that have also turned to retail investors. And the reason for that is I think retail investors are more used to having the ability to just withdraw money whenever they want to, and there is a tension between that thought and the relatively illiquid nature of many of these investments. Institutional investors who account for the vast majority of funding I think understand that point, but it's something that many retail investors are not quite as used to. That disjuncture is exactly why these private credit funds have gating constraints on the size of withdrawals that are possible at any point in time. It's when someone wants money back and they don't get it back immediately. Anything else you wanted to add, Tracy?

I would just go back. We noted earlier the restructuring. There's a lot of opportunity there. Even my net practice is these challenges emerge that exist. And then I go back to part of IPOs earlier, but just other financials. That's helpful, Keller. And then for my follow-up,

I just wanted to touch on the cross-border environment at the moment. You know, with the conflict in the Middle East, once again, highlighting the fragility of global supply chains, I just want to get a sense of the extent of which some of your larger multinational clients are rethinking their respective footprints and whether you see this as spurring more cross-border M&A activity once we're past the conflicts?

I would say that large multinational firms are definitively rethinking their supply chain footprints. That's pretty much a cross even when this conflict is resolved, I think about the various options there, but even when this conflict is resolved, the risks associated with being cognizant that there are various choke points across the global economy are today than was the case a decade ago, and boards are responding to that recognition by trying to create more resilience. The tradeoff is it's not so easy to decide in some sense how much insurance you're going to take out against those choke points because it's expensive to do it. And so I think that's exactly what, and I don't mean literal insurance, I mean geographic dispersion that attenuates the choke point. So I think that's what you're seeing. I don't know that the end of the hostilities in the Middle East is going to be the kind of break point for questions because they'll appreciation that we're just in a new environment. Even if peace breaks out, choke points across the world will again be used for leverage in a geopolitical conflict is well appreciated by boards and C-suites, and so they're evaluating how to respond to that. I would just highlight again, I think uncertainty is unfortunate for the global economy, something where clients increasingly look to a place like Lazard to help them guide, to help get insight into what they should and could be doing. I've emphasized before the contextual alpha era that we're in. I think we are living in an era of contextual alpha, and Lazard's geopolitical team integrated with our banking teams and then also integrated with our investment professionals on the asset side meet that moment.

Thank you. We have a final question from Alex Bond with KBW. Please go ahead. Alex, please make sure that you're unmuted. All right. This does conclude Lazard's first quarter 2026 Earnings Conference call. You may now disconnect.