Lazard Ltd. (NYSE:LAZ) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 08:00 am ET


Lazard Ltd. (NYSE:LAZ) Q2 2020 Earnings Conference Call - Final Transcript


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Q & A
Evan L. Russo

year that closed in the second quarter of this year. I think the significant activity that we picked up new mandates towards the end of Q1 into Q2 really play out over the course of the next three quarters. So it's really Q3, Q4 and then Q1 of next year. I think that's generally the time line that you have to look at. I'd say, predominantly, you'd probably have a bigger skew towards Q4 than Q3 in that business at this point in time. But this is all very, very fluid. These transactions, as you alluded to, can move very, very quickly. And in many cases, they've moved faster even through the bankruptcy processes than one might have done historically. So timing is a little bit different, I think, this time around than it was last time around. You're seeing active restructuring assignments closed quickly in the context of liability management and other types of financing solutions that are going on. And then the sort of bankruptcy, longer-term restructuring cycle, some of them are going a little bit quicker, some of them will go a little bit slower. So I think you're going to see it play out over the next two to three quarters. I think every transaction is kind of different. There isn't much of the same.

I'd say in terms of the scale and the size, I think, as you talked about, the last -- as Ken mentioned, this could be a very big cycle. I mean it's still in the early phases of knowing how that's going to play out. I think we certainly have a very strong belief in the business right now. It's certainly what we saw the level of activity that started at the end of Q1 and into Q2 of this year. As we've said, for our business, historically, restructuring revenues as a percentage of the total Financial Advisory could range anywhere from 10% to 40-plus percent in some of the real deep recession and heavy type of restructuring scenarios. And I think we're certainly gearing more at least this year and a little too early to know for next year. But it certainly looks like it could build into that sort of higher end of those ranges for the next year, year and a half.

Devin Ryan

Terrific color. And then just a follow-up, dig in a little bit more on some of the M&A commentary. And really the question is around just the tone and then what you guys are seeing. I appreciate there's a lot of uncertainty so it's hard to be -- maybe completely confident in what the future holds here. But we've been hearing a little bit of a different commentary across earnings calls here this season where I think some companies are maybe a little bit more cautious, some are feeling better. It does seem like firms or global platforms and maybe they're levered to some of the larger companies. It seem to have a little bit more