(Bloomberg) - Lazard Ltd. Chief Executive Officer Ken Jacobs said clients are involved in more dealmaking conversations, pushing activity to historic levels even as the risk of recession rises.
“Increasingly one has to have that in your sights, for no other reason than when you see interest rates going up,” Jacobs said Thursday in a telephone interview after the company released first-quarter results. With the Federal Reserve raising borrowing costs, “you have to believe there’s going to be some impact on the economy,” he said. “The question is, Is it a slow down? Is it a soft landing?”
Lazard, one of the world’s top 10 merger advisers, is seeing a pickup in dealmaking after a slowdown in February. Valuations have become more attractive for mergers and acquisitions, though there are still some frothy areas, Jacobs said, pointing to the biotechnology industry and technology companies that struggle to post profits.
While the high-yield debt market has clearly backed up, Jacobs said banks and private credit firms have been able to help finance corporations.
Lazard said revenue for its financial-advisory business rose 22% during the quarter, while asset-management revenue dropped 5%. Profit of $1.05 per share beat analysts’ estimates.
“The outlook is generally positive, at least for this point, for the rest of 2022,” Jacobs said. “Anytime you see this kind of uncertainty in markets you have to be a little cautious.”
By Sonali Basak
