Lazard Ltd.’s Peter Orszag is setting fresh targets for the 175-year-old investment bank, including doubling revenue by the end of the decade.
(Bloomberg) — Lazard Ltd.’s Peter Orszag is setting fresh targets for the 175-year-old investment bank, including doubling revenue by the end of the decade.
Orszag, who takes over as chief executive officer next month, also aims to double earnings by 2030 under a plan to improve performance among the firm’s investment bankers, according to a memo to staff Thursday.
“Ambition — that’s a word that we’re happy to own,” Orszag, 54, said in an interview. “We’re ambitious about our future.”
Lazard is looking to boost performance roughly evenly between its key investment-banking and asset-management businesses. Several leaders were named to help implement Orszag’s plans, as the firm eliminates his prior role: CEO of financial advisory.
Mark McMaster, a 35-year Lazard veteran, will remain global head of mergers and acquisitions, while Jean-Louis Girodolle and Cyrus Kapadia will be co-heads of European investment banking.
“The growth in advisory will require a combination of higher productivity,” in part by having a larger number of managing directors among the firms’ ranks, Orszag said in the memo. “Expanding the number of managing directors will come not only from our historical strength in developing our own high-quality bankers, but also from hiring productive bankers laterally – and then onboarding them effectively.”
Shares in the bank were up slightly to $33.29 at 10:28 a.m. in New York. They are down about 4% this year.
The company is planning to increase productivity per managing director and hire more senior bankers after outlining plans in April to reduce its workforce by 10% this year amid a prolonged dealmaking slump. Other top banks have been trimming staff as they contend with the muted environment and inflation, including Goldman Sachs Group Inc. and Citigroup Inc.
Lazard has “ample room” to double the size of its advisory business in both in the US and Europe and is also eyeing growth opportunities in other parts of the world, including the Middle East and North Africa region, according to Orszag.
Meeting Goals
To meet its 2030 revenue goal, the bank plans to hit double-digit revenue growth annually on average, which it said is more in line with similarly-sized peers. It is also targeting for its total shareholder return to average 10% to 15% per year through 2030.
Orszag, a former director of the US Office of Management and Budget in the Obama administration, is also installing new senior executives.
Alexandra Soto, chief operating officer of the financial advisory business, takes over as COO of Lazard. Soto, who has been at Lazard for three decades, will be succeeded by Jason Bernhard. Apollo Global Management Inc.’s Chris Weideman will join as general counsel, succeeding Scott Hoffman.
“The path ahead will require capturing untapped opportunities in many industry and product sectors,” Orszag wrote, “with existing strength in many areas and our largest future opportunities in technology, healthcare, industrials, and all aspects of energy.”
(Updates with shares, further details from seventh paragraph.)
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