For 175 years, Lazard has experienced various crises and challenges. Now it has a new leader, Peter Orszag, to help propel it through a changing competitive environment and a tricky global economy.
Lazard is an advisory and asset management firm that is immune to the balance sheets and proprietary trading desks of larger competitors. Unlike most independent companies, it is global. Listed on the US stock market, with deep roots in France and the UK, it now operates in more than 20 countries.
The advanced financial field will not rest on its laurels.Despite its illustrious history, Lazard’s Lunch Increasingly being snapped up by US-centric upstarts.
Lazard’s consulting business will generate $1.65 billion in revenue in 2022, up from $1 billion a decade ago. A compound revenue growth rate of nearly 5% per year doesn’t look too bad. But that pales in comparison to the industry’s most successful player, Evercore. Founded in the mid-1990s by Blackstone veteran Roger Altman, the company will surpass Lazard in revenue in 2022 with $2.4 billion in deals. It also proved to be more profitable, reflecting the operating leverage of the human capital business. Over the past 12 years, Lazard’s stock price has stagnated, while Evercore’s stock price has nearly tripled.
Evercore’s trajectory can be traced to Altman’s strength of character and his skill at picking bankers. Orszag doesn’t yet have deep Wall Street pedigree. But he could attract bankers interested in his political star qualities.
The Lazard franchise has been around for over 175 years. By contrast, the fortunes of upstart boutiques like Evercore are often tied to their founders. This puts them at risk of intergenerational replacement. Greenhill, which sold itself this week for a fraction of the stock market’s highs a few years ago, offers a cautionary tale.
Orszag’s ability to influence share prices may be limited by broader market forces beyond his control. Still, some big early wins could get all stakeholders excited again, in terms of hiring, deal mandates or simply getting a new idea for Lazard’s two businesses.
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