Company: LAZ
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0001628280-25-007441
Chunk: 122

Company: Lazard, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 1A
Chunk 122
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 significant client or asset departures or a reduction in AUM.

We could lose clients and suffer a decline in our Asset Management revenue and earnings if the investments we choose in our Asset Management business perform poorly, regardless of overall trends in the prices of securities.

Investment performance affects our AUM relating to existing clients and is one of the most important factors in retaining clients and competing for new Asset Management business. Poor investment performance could impair our revenue and growth because:

•existing clients might withdraw funds from our Asset Management business in favor of better performing products, which would result in lower asset management fees;

•our incentive fees, which provide us with a set percentage of returns on some alternative investment and private equity funds and other accounts, would decline;

•third-party financial intermediaries, rating services, advisors or consultants may rate our products poorly, which may result in client withdrawals and reduced asset flows; or

•firms with which we have strategic alliances may terminate such relationships with us, and future strategic alliances may be unavailable.

Over certain time periods, we may have a higher concentration of assets in certain strategies. To the extent that this is the case, changes in investment personnel or other changes in these strategies may result in significant withdrawals of assets and related declines in our revenues and operating results. 

Because many of our Asset Management clients can remove the assets we manage on short notice, we may experience unexpected declines in revenue and profitability.

Our investment advisory contracts are generally terminable upon very short notice. Institutional and individual clients, and firms with which we have strategic alliances, can terminate their relationship with us, reduce the aggregate amount of AUM or shift their funds to other types of accounts with different rate structures or to other asset management firms for a number of reasons, including investment performance relative to the market, prior years or other asset management firms, departures from or changes to the teams that manage our investment products, changes in prevailing interest rates and financial market performance or for no stated reason. In addition, the ability to terminate relationships may allow clients to renegotiate reduced fees paid for asset management services.

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In addition, in the U.S., as required by the Investment Company Act, each of our investment advisory contracts with the mutual funds we advise or sub-advise automatically terminates upon its “assignment.” Each of our other investment advisory contracts subject to the provisions of the Investment Advisers Act provide, as required by the Investment Advisers Act, that the contract may not be “assigned” without the consent of the customer. A sale of a sufficiently large block of