Lazard, sitting at #10 in the M&A League Tables, didn’t experience the Q1 advisory growth of many of the top banks (cough…Goldman and Morgan Stanley). Lazard is quick to “highlight” in its earnings release that M&A revenue set a new quarterly record, although it only grew 1%. Counting a drop in financial structuring revenue, total financial advisory revenue for the bank remained completely flat. Goldman and Morgan Stanley both experienced double digit quarterly advisory revenue growth.
Referring to the financial institution investor appeasement playbook (pg. 11), Lazard Vice Chairman Steven Golub went with the power-“backlog” formation. Golub wants to assure you that the check’s in the mail, and that there are at least five or six ‘second biggest LBO ever’ transactions in the pipeline. His comment, from the company press release:
Our results are best measured on an annual basis rather than on any single quarter. This year our backlog for completion of transactions seems to be weighted toward the second half of the year. We continue to focus on controlling costs. The increase in our non-compensation expense was impacted by, among other factors, one-time cost recoveries in the first quarter of 2006. We remain confident that the operating leverage in our business model will continue to yield long term positive results.
Sitting Out the M&A Party at Lazard? – [WSJ Deal Journal]