Company: LAZ
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001628280-25-007441
Chunk: 112

Company: Lazard, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 1A
Chunk 112
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 and market conditions have in the past adversely affected and could again in the future adversely affect our financial performance in both the Financial Advisory and Asset Management businesses. The future market and economic climate may deteriorate because of many factors, such as a general slowing of economic growth globally or regionally, periods of disruption or volatility in securities markets, volatility and tightening of liquidity in credit markets, volatility or significant realignments in currency markets, an evolving regulatory environment (and the timing and nature of regulatory reform), increases in interest rates, supply chain disruptions, inflation, corporate or sovereign defaults, natural disasters, pandemics, terrorism or political uncertainty or instability.

For example, revenue generated by our Financial Advisory business is directly related to the volume and value of the transactions in which we are involved. During periods of unfavorable or uncertain market or economic conditions, the volume and value of M&A transactions may decrease, thereby reducing the demand for our Financial Advisory services and increasing price competition among financial services companies seeking such engagements. For example, changes, or proposed changes, to international trade and investment policies of the U.S. and other countries, such as new or increased tariffs, could negatively affect market activity levels, and the new U.S. presidential administration has increased tariffs on imports from China and proposed imposing or increasing tariffs on U.S. trading partners. Our results of operations would be adversely affected by any such reduction in the volume or value of M&A transactions. In addition, our profitability would be adversely affected due to our fixed costs and the possibility that we may be unable to reduce our variable costs without reducing revenue or within a timeframe sufficient to offset any decreases in revenue relating to changes in market and economic conditions.

Our Asset Management business also would be expected to generate lower revenue in a market or general economic downturn. Under our Asset Management business’s arrangements, asset management fees we receive typically are based on the market value of AUM. Accordingly, a decline in the prices of securities, or in specific geographic markets or sectors that constitute a significant portion of our AUM (e.g., our emerging markets strategies), would be expected to cause our revenue and income to decline by causing:

•the value of our AUM to decrease, which would result in lower asset management fees;

•some of our clients to withdraw funds from our Asset Management business due to the uncertainty or volatility in the market, or in favor of investments they perceive as offering greater opportunity or lower risk, which would also result in lower asset management advisory fees;

•some of our clients or prospective clients to hesitate in allocating new assets to