Lazard eyes senior dealmaker hires as larger rivals cut back amid downturn

Independent investment bank Lazard is set to hire more senior bankers despite a downward shift in the dealmaking boom that has seen larger competitors cut costs.

The bank is aiming for 10-15 managing director hires over the course of this year, Peter Orszag, chief executive of Lazard’s advisory business told Financial News. “We have been actively recruiting, and as the market shifts there are even more opportunities to find really talented people on compensation terms that we find acceptable,” he said. “There are several priority areas for growth and we’re going to invest throughout the cycle.”

READ Lazard CEO Jacobs: Fierce battle for top dealmakers has cooled off

Lazard unveiled a 14% drop in advisory revenues during the second quarter of 2022, to $407m as investment banks struggled against a slowdown in deals from record highs. Economic fears have dented appetite, while financing markets for large transactions have been largely frozen. Overall profit at the bank fell 22% to $95m.

Orszag said that Lazard was looking for bankers in healthcare, technology, media and in Germany as well as looking to bolster its private credit team. It has already unveiled eight managing director level hires in the past month and Orszag said that continental Europe and the UK were also potential areas of growth.

Ken Jacobs, Lazard’s chair and chief executive, said that the bank was being more disciplined on costs, but was still investing in the business. “You need to balance carefully the attractiveness of investing into a downturn, because that is when you get well-positioned for when the cycle turns. It is something we have been focused on for a long time.”

JPMorgan and Morgan Stanley unveiled declines of around 55% in their investment banking fees during the second quarter, while revenue fell by 41% at Goldman Sachs over the same period. Goldman and Morgan Stanley have both cut back pay during the first half of the year.

Banks pulled in a record $130bn last year, according to data provider Dealogic but fees are down 46% so far in 2022 to $46.2bn. 

“I think there is going to be a bit of a timeout until there is a reset in terms of credit conditions, but also in terms of valuations,” Jacobs said on the outlook for deals. “That is probably a few months in the best case and could be a little bit longer in a worse case.”

To contact the author of this story with feedback or news, email Paul Clarke

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