Yahoo Finance

Mary Betsch

Thank you, Peter. Firm-wide adjusted net revenue was $812 million for the fourth quarter, up 7% from the prior year and $2.9 billion for the year, up 18% from 2023. These results illustrate our inflection towards growth as part of our long-term strategy for Lazard. Our increase in firm-wide revenue this year was primarily driven by our Financial Advisory business. Financial Advisory adjusted net revenue was $508 million for the fourth quarter, up 6% from 1 year ago and $1.7 billion for the full year, up 28% compared to 2023. Our financial advisory team demonstrated increased productivity and won new business across the firm. As a result, Lazard participated in a number of marquee transactions in the fourth quarter and into January.
Recently announced transactions include Constellation Energy's $26.6 billion acquisition of Calpine, and Berry Global's $15 billion combination with Amcor. Completed transactions include Vivendi's EUR 9.5 billion spin-off of Canal+, Havas and Louis Hachette Group, and Cencora's $4.6 billion acquisition of Retina Consultants of America. In addition, large corporate restructuring assignments include Consolis and Enviva while creditor and related party roles include Accuride and SVB Financial Group. We also advised on several private capital markets assignments including Dropbox's $2 billion secured term loan led by Blackstone Credit & Insurance and EQT on its fund-to-fund liquidity solution and capital raise for Nord Anglia Education.
Turning to Asset Management. Adjusted net revenue was $287 million for the fourth quarter, up 5% compared to 1 year ago and $1.1 billion for the full year, up 3% compared to 2023. Our revenues reflected resilient management fees of $258 million for the fourth quarter, in line with the prior year quarter and $1.1 billion in 2024, up 2% compared to the prior year. Incentive fees were up in both the fourth quarter and for the full year, totaling $29 million and $43 million, respectively, highlighting the strong outperformance of several of our key strategies, as Peter mentioned. As of December 31, we reported AUM of $226 billion, 8% lower than December 2023 and 9% lower than September 2024. During the quarter, we had market depreciation of $2 billion, foreign exchange depreciation of $9 billion and net outflows of $10 billion.
Average AUM for the full year was $243 billion, 4% higher than 2023. Our ability to customize strategies and solutions to meet unique client needs has resulted in several large mandates. During the fourth quarter, new business included the initial funding of a custom global equities mandate with an additional $2 billion anticipated over the course of 2025 and several mandates that were funded in emerging markets equity quality growth and quant strategies.
Now turning to expenses. Our adjusted compensation expense was $533 million for the fourth quarter and $1.9 billion for the full year 2024. This resulted in a full year compensation ratio of 65.9%, an improvement of 390 basis points from 2023. As we've shared previously, we continue to anticipate achieving a 60% target compensation ratio in 2025. Provided our Financial Advisory business grows as we expect, and we hire financial advisory MDs at the pace we expect. That said, we are engaged in a wide array of recruiting discussions that reflect our momentum. And if we have the opportunity to bring on even more talent this year, we will do so. Our adjusted noncompensation expense was $154 million for the fourth quarter and $575 million for the full year 2024. This resulted in a non-compensation ratio of 19.9% for the year, which brings us back within our target range. Our cost containment efforts have helped to offset investments in client development and technology keeping noncomp expenses nearly flat in 2024, while firm-wide revenues grew 18%. Shifting to taxes. Our adjusted effective tax rate for the fourth quarter was 18.1% and compared to 16% for the prior year quarter. Our effective tax rate for the full year 2024 was 24.4%, reflecting the favorable court decision in a long-standing tax matter during the year.
Turning to capital allocation. We continue to balance investments in growth with returning capital to our shareholders. In the fourth quarter of 2024, we returned $61 million to shareholders including a quarterly dividend of $45 million and $16 million in share repurchases. For the full year 2024, we returned $303 million to shareholders including $179 million in dividends, $60 million in share repurchases and $64 million in satisfaction of employee tax obligations. Additionally, yesterday, we declared a quarterly dividend of $0.50 per share. During 2024, we repurchased 1.4 million shares at an average price of $42.20. Today, our outstanding share repurchase authorization is approximately $180 million.
Now I'll turn the call back to Peter.

Peter Orszag

Thank you, Mary Ann. During 2024, we made significant progress against our Lazard 2030 goals. Financial advisory revenue for the year nearly matched our record from 2021. These results reflect the M&A cycle developing as we expected, our successful recruiting efforts and our bankers increasingly embracing our commercial and collegial culture in serving clients. and exceptional performance across Europe in 2024.
For completed M&A, Lazard maintained the number 1 position in France ranked number 3 in Germany and moved up to number 4 for Europe and the Middle East overall. We also had strong performance in the Americas, with revenue growth of 41% compared to 2023. In addition, our connectivity of private capital has expanded substantially over the past few years. Revenue associated with private capital now constitutes approximately 40% of our overall financial advisory revenue, up from 1/3 a year ago even as we experienced overall advisory revenue growth.
Over time, we aim to have revenue associated with private capital closer to 50% of total advisory revenue as market activity increases and our connectivity continues to expand. Our respected brand and long-term vision for the firm are increasingly attracting exceptional talent. We remain on track to achieve our MD growth target by the end of the first quarter of this year and we are in active discussions with numerous additional potential hires.
We plan to continue our investment in MD growth of 10 to 15 net additions annually. In addition, we are ahead of schedule with our efforts to raise MD productivity, another goal outlined as part of our Lazard 2030 plan. Revenue per MD was $8.6 million for the full year 2024, 1 year ahead of our target to achieve $8.5 million this year. As a further spur to productivity, we have now also raised our minimum fee again on each mandate.
Looking ahead, the tailwinds for Financial Advisory continued to strengthen the technology and generative AI, the biotech revolution, ongoing expansion in energy demand and efforts to derisk supply chains create opportunity for clients. In the US , shift in the antitrust and regulatory environment also appear to be positively influencing M&A discussions. While a further decline in interest rates would be beneficial, it would be secondary to these factors in driving activity.
Overall, we see an increasingly constructive environment for our advisory business this year. Turning to asset management, we have made investments to strengthen our distribution, research and investment platforms that position us well for 2025. As I laid out in a recent conference, our outlook for this year is based on several factors.
First, investments and organizational changes made to strengthen the business, plus work done to scale and position our specialty products with clients have led us to enter 2025 with a substantial level of 1 but not yet funded mandates. In addition, new vectors of growth recently established such as active ETFs and US
Wealth Management also support our outlook along with the potential renewed interest in stock beyond a handful of very large US equities. It is worth noting that different parts of our asset business have different characteristics, which ultimately affects flows. To be more specific, our sub-advised funds associated with US multi-manager mandates have different dynamics from the rest of our business.
These large US subadvised funds represented more than half of net outflows in the fourth quarter, but the assets in this category represent less than 5% of our asset management revenue. Another 95% of our revenue is outside of this category and includes strategies such as quant emerging market equity, global and specialized products like Japanese equity and infrastructure.
This portion of our business had more balanced flow activity in the fourth quarter and it also represents all of the $10 billion in 1 but not yet funded mandates we had entering 2025. During this year, we will continue to prioritize areas where we see opportunities for growth in asset management. This includes meeting client demand through our expanded methods of delivery such as wealth management and active ETFs.
Earlier this month, we filed our initial SEC registration statement to launch several offerings later this year. Our initial lineup of ETFs showcases some of our most compelling strategies for active management across market segments in which Lazard has a long proven track record of outperformance. This marks a notable next step in our shift to offer more investors access to our premier investment products through a more efficient vehicle.
Overall, our fourth quarter and full year 2021 results demonstrate the ongoing successful execution of our long-term growth strategy against an improving economic and market backdrop. Looking ahead, we anticipate an increasingly constructive environment for both of our businesses in 2025. And as always, we remain focused on helping our clients successfully navigate complex business and investment decisions and on delivering long-term value for our shareholders.
Now we'll open the call to questions.

Question and Answer Session

Operator

(Operator Instructions)
Devin Ryan, Citizens GMP.

Devin Ryan

Great, Peter, Mary Ann and Evan, how are you? I want to start on the asset management business. I really appreciate the detail on the $10 billion of mandates just to kind of contextualize some of the progress there. It would be great to just understand how that compares to prior years. How that correlates to gross flows in the year ahead?
And then maybe more importantly, you did touch on a high level some of the changes that you guys have been implementing to drive more wins there. So would be great to hear a little bit more about how that's specifically happening? And then where do you think we are? Can $10 billion next year grow to something much higher because you're still in the early innings of kind of this kind of process change that you've been making in asset management.

Peter Orszag

Thanks. Let me start, and then maybe Evan can add any commentary as appropriate. Look, I think there are a couple of different things to kind of peel back then on first on the $10 billion, that is materially higher than other recent years. We haven't released that number. I'm not going to give you the exact quantum, but the reason we called it out is it is higher than it's been in recent years, a significant amount. And obviously, that is only part of the picture for the year as a whole.
As you correctly noted, we're calling it out just because we're entering the year with some wind at our backs given that that amount of 1, but not yet funded mandates, but that would be the minority of the overall gross inflows for the year because we do anticipate we have a whole plan for on the distribution side for where we think the most promising prospects are.
With regard to what we're doing, I would highlight 2 things. One is we have made significant investments in our platform, everything from new portfolio managers, small cap S. equity is a good example. There are many, many others to investing in our research team, where we brought on a series of new analysts and I think that's what's in addition to a renewed focus from our sales and distribution teams, that's what's producing these results.
Obviously, we provided -- the second point is we've provided some context on large US sub-advised funds versus the rest just because the dynamics are different, the nature of decision-making is different, the flow dynamics are different, and we wanted people to know that the vast majority of our revenue is in a category that is outside of those large US sub-advised funds. I don't know, Evan, if you want to --

Evan Russo

No, I think you summarized it well. It's a strong foundation that we've set over the course of the past year, Devin, to sort of lead us into 2025 with just a lot more momentum some of that is just stuff that was produced over the course of the year, larger -- some larger mandates as well that we'll fund throughout 2025.
But as always, we're continuing to build upon that even as we enter the year and continuing to build that month-over-month as you'll see in the flows. What we're also seeing is just stronger interest across a lot of those areas that we have called out. So Quant Japan, credit, fixed income, and even some emerging markets, which we've been talking about for the last several quarters, so seeing some of that come through in gross flows and new wins, I think, is a very positive sign for our business.
And we're starting to see the activity level with clients pick up in areas that had certainly been slower for the last year, 1.5 years, where the market has significantly been focused on specifically US and the growth style within US So focusing on trying to find ways to capture the upside across the AI trade, which is a handful of stocks in that region.
So when you start to see the clients think about diversifying outside of that trend and that trade, that's going to sit well with us given our international global emerging markets focus and our relative value and quality style of the way we invest. So those are the things that line up for us as we enter into this year give us a lot of confidence that this -- we're off to a strong start, but the momentum is building.

Peter Orszag

And just to run just a final point is any of the areas where we have already seen inflows in the fourth quarter. A good example of emerging market equities, Japanese equity. Those are also areas in which we've got very strong outperformance. So there's a significant base to build upon as we enter this year.

Devin Ryan

Thank you for that comprehensive answer on that. Okay. A quick follow-up on Europe. And obviously, overall advisory results were very good firm wide. You called out Europe as kind of 1 area where activity was also strong. And so Lazard has obviously a pretty good window into Europe and maybe more than most.
And so I want to just hear about how you're thinking about the outlook for M&A, specifically in Europe relative to the US market. As you think about your your projections over the next couple of years? Are the drivers -- does it feel like the same optimism or opportunity in Europe relative to the US or even more so, I'd love to just hear your thoughts on that given that it is an important part of the business.

Peter Orszag

Sure. So a few things. I think it's really important to note that the correlation between the sort of macroeconomic backdrop and M&A activity and M&A revenue is certainly not perfect. And all you need to do is look at 2024. 24 was not a stellar year for the euro European macro economy, but it was a record year for our advisory revenue, highlighting that there are a lot of puts and takes in between GDP growth to M&A and other revenues.
So that's the first point. The second point is there's very clearly a focus in Europe about improving that macro backdrop. So just yesterday, he's underlying released a pretty comprehensive plan that follows up on the Draghi report to address regulatory burdens and other impediments to growth in Europe. I think that's very encouraging. I will say that in a variety of the discussions in that was, the biggest question was, it sounds good that the Europeans are focused on this, but how much are they going to step up and actually do. So the first step in doing is to have a specific plan. That has now been put out.
And now it's a question of trying to implemented and pass it in the number of countries, but it's still progress. And then the final point is, I guess it's related to the first, which is a lot of European companies like companies across the globe are looking to diversify their supply chains and are looking to diversify just their geographic mix.
And so a lot of -- we're seeing a lot of European interest in US company M&A. And I think Lazard is very well positioned to meet that demand because we are the only independent advisory firm that has strong local roots in both North America and Europe. And so as that interest European interest in US firms, in particular, grows, and we anticipate that based on based on logic and the discussions we're having, that that will be a significant area of activity in 2025, we think we benefit from that.

Devin Ryan

Okay, great color. Thank you so much appreciated.

Operator

Brennan Hawken, UBS.

Brennan Hawken

Good morning, Evan, and Mary Anne, and Peter. How you doing. I'd love to drill into your target for 60% comp ratio expectation in two believe Mary Ann referenced advisory revenue growth. So I'd love to maybe get some more texture around that assumption. I'm just struggling to figure out how to get there. Is there going to be any change in the structure of comp maybe like more deferrals or longer deferrals. What are the building blocks?

Peter Orszag

Well, look, I'd say a few things. First, obviously, the comp ratio has many, many different inputs into it. And the mapping -- I feel for you a little bit because the mapping from overall revenue growth to the comp ratio has a lot of different complexities associated with it. I'll give you just 1 example. We have really succeeded in shifting the distribution of managing directors towards -- if you think about the distribution across productivity towards the more productive end of the spectrum and reduce the share of managing directors that are at the lower end of productivity.
So for any given revenue amount. That shift in the distribution helps to bring down the comp ratio on average because what typically happens in this firm is the bankers that are less productive effectively get cross subsidized. And so the overall comp ratio is higher at a given level of revenue. And without that kind of detail, it's very difficult to do the mapping directly from revenue on to the comp ratio.
So we remain -- we believe that we will be able to achieve this under the conditions that we stipulated. I'd also highlight the other factor, which is clearly, this is also dependent on on the hiring environment. We have -- we will succeed in being inside our target range for -- sorry, Q1 '23 to '24, based on the number of discussions that we're having that are really promising, it is possible that we're going to be higher in terms of lateral activity. in 2025. There's a lot of interest in our platform now that there's a sense of momentum and inflection.
And if we need to -- if we need to bump up the comp ratio temporarily in order to bring on more talent, we will do that because we believe that over time, it will result in a lower overall comp ratio. So maybe I'll just go back to highlighting something that I've said repeatedly, absolutely core driver of the comp ratio, especially in advisory. And that is where most of the variance from year-to-year arises because the asset results are relatively stable. I know some people have tried to tie the comp ratio to net flows that there's not that much connectivity from 1 to the other.
This is really going to be dependent on what happens within the advisory business. And I just want to pause and again highlight how important productivity per MD is because that is where you get operating leverage in the advisory business. And I've used a simple example before of makeup whatever number you want to of non-MD costs per MD. -- let's use $3 million as an example. There's a fixed cost of $3 million.
Energy Director is generating $5 million of revenue. That's a 60% non-MD comp ratio same Managing Director or a different one, roughly the same non-MD cost, generates $15 million in revenue. That's a 20% non-MD comp ratio. And so you can see there's just dramatic operating leverage that comes as we raise productivity, and that's what's been happening. The average is going up, but also the distribution is shifting to the more productive part of the distribution.

Brennan Hawken

Appreciate that. So I'd have to circle back, though, on a component of my question, which is, is there going to be any change in the compensation structure as you're.

Peter Orszag

No. And in fact, this year, we were able to bring the deferral rate down a bit and the cash percentage up a bit. We would like to continue doing that over time if we can. But I think your question was really, are we going to go in the opposite direction. We don't anticipate that. Again, this is all -- let me just back up. This is all predicating on the operating environment developing as we expect. And then our job is within that operating environment to deliver the results and that's exactly what happened in 2024. And assuming the operating environment cooperates with us, that's what will happen in 2025.

Brennan Hawken

Yes. And totally get that revenue and recruiting are going to be big factors. And for what it's worth, I'm not that far from your 60. I just can't get it all the way there. More revenue growth than I'm underwriting certainly will help. So -- the -- I'd love to ask a question on the share count. So I know you guys have buybacks on hold. But how is the war chest looking? Do you think at this stage, you have a sufficient war chest because -- and maybe it'd be helpful to understand the drivers of the fully diluted share count grinding up nearly 10% here this year and what your outlook is for maybe coming back to market with buybacks to at least neutralize some of this stock-based comp?

Peter Orszag

Yes, I'd say just really briefly, and then I'm going to let Mary Ann go into more detail. You should expect a change in the pace of buybacks over time. and we will be moving -- again, over time, it may not be immediate to offsetting all of the dilution from stock-based compensation, the deferred compensation. moving through time to that objective and that will be the medium-term objective, but Mary Ann, you want to --

Mary Betsch

Yes, sure. So if you think about the 3 main components of the change in fully diluted shares, right, it's the amortization of awards, is the change in share price under the treasury stock method and then those are offset by buybacks that we do. So thinking about 2024, we had elevated amortization because if you remember, in prior years, we had done some deferrals in the form of fund interest, which we didn't do starting last year. So you had more share-based brands than in prior years.
So you have some increased just based on elevated amortization coming in, then you have the impact of our share price being very thankfully elevated over the course of the year, which does have an impact under that treasury stock method. It just sort of artificially or on paper increases the share count. And then the buybacks, which normally mitigate those factors were less last year. So I think if you thinking about that going forward, I was share price unknown, hope it keeps going up. The amortization, I think, will probably be relatively stable from year-to-year. And then the buybacks, as Peter said, I would expect to be higher this year than last year overall.

Brennan Hawken

Great. Thanks for that color.

Operator

Brandon O'Brien, Wolfe Research.

Brandon O'Brien

Good morning and thanks for taking my questions. I guess, sorry, just a follow-up on the comp question from earlier. I understand that the comp ratio is largely going to be driven by improvement in the advisory business. But looking at the segment by segment disclosure and the debt, your comp ratio within asset management has increased pretty materially over the last 4 years.
So I just want to get a sense as to whether you do need to see like management fee growth within the asset management business in order to get that comp ratio back down -- or if you fell short of that, whether excess growth within advisory and that mix shift could end up getting you there anyway?

Peter Orszag

I would say we don't need any significant changes in the asset business to produce the results that we were talking about so.

Mary Betsch

I would just add on to that. If you're looking at the asset management comp ratio, the biggest change was this year. and the driver of that was really the decrease in deferral rates that Peter mentioned. So we actually had a pretty significant improvement in our deferral rates year-over-year, and that came through in the current ratios in both businesses, but it was more pronounced in asset management.

Peter Orszag

Yes, I would more characterize the underlying comp ratio adjusting for deferral rates is relatively flat.

Brandon O'Brien

Okay. That's helpful. And I guess just wanted to get a sense, you mentioned this in your prepared remarks, Peter, post election, a pickup in activity. Just wanted to get a sense as to how meaningful that improvement has been and whether we get a flavor of the difference between the level of dialogue between sponsors and at the moment?

Peter Orszag

Yes. Look, I'd say what was happening last year it was significant strategic activity and dialogue. And as we got into the or the end of the year, it was very clear that private equity and alternative asset managers were coming back onto the playing field. that has definitively continued into this year. And so you've got an environment in which both strategics and sponsors seem to be quite active and we're playing to win in both categories.
So I highlighted that the share of our revenue associated with private capital has risen to about 40%. And we see further room for growth there. but we also see lots of ongoing public company and strategic dialogue. So it's pretty much across the board. And I think the way I would characterize it is this cycle was developing anyway and then you layer on because of underlying drivers that I've already gone through.
But if you then layer on a more accommodating regulatory environment, especially on vertical deals, I think that's where the biggest shift is likely to occur in the antitrust environment. But just the overall atmosphere, if you will, leads to increased CEO and Board confidence to proceed -- and then there are other factors that are helpful.
So the valuation disconnect between buyers and sellers has narrowed as the valuation ranges have come back into more normalized a more normalized environment and so on, and financing markets are generally open. So you put all that together, it looks very constructive, and that's what we're seeing. I've said this before, the advisory business is volatile. It's not going to be a linear quarter-by-quarter thing. But overall, we see a very constructive environment moving forward.

Brandon O'Brien

Great. Thank you, guys, for taking my questions.

Operator

Jim Mitchell, Seaport Global Securities.

Jim Mitchell

Just, Peter, on the -- it's just sort of the productivity and headcount discussion. It seems like there was sort of another step down in the head count in the third quarter. So it seems like it would take a lot where you are today in the fourth -- at the end of the fourth quarter getting to the first quarter kind of target of 10% to 15% net growth. So is there that many new hires in the pipeline? Or also you have to think about the number of promotes, if maybe you can help get to 194 MDs to 210 plus would be helpful.

Peter Orszag

Sure. And this is why we did first quarter to first quarter as the kind of measurement period because, to your point, there is a lot of fluctuation. A lot of the people that we're parting company with will be exiting -- the exit and the kind of seasonal pattern depending on the notice period, et cetera, et cetera. And then to your point, the promotions coming in during the first quarter.
And I will just reiterate, I can say with your perfect certainty that we're going to be in the 10 to 15 net add range by the end of the first quarter. So we're highly confident in that. And a lot of it does have to do with just the seasonality of the departures and then the promotions.

Jim Mitchell

Okay, that's great. And do you feel -- it seems like there has been a lot of hiring even this last year, even though head count as growth. So do you feel very positive about sort of the upgrades that you've done and the momentum from the new hires you had already this year?

Peter Orszag

Massively. So a couple of comments. First, what we were able to accomplish over 2024 and then a little bit in the recent history right before that, is to fill in gaps that we had in our global platform on the advisory side. So we now have a first-rate sports meeting and entertainment team. We now have a first-rate consumer retail team. We now have a first-rate team in Germany. We now have a very strong kind of flywheel effect across PCA, the fundraising business, restructuring and liability management, sponsor coverage Lazard Capital Solutions, et cetera, with regard to how we're interacting with the large alternative asset managers.
None of that was true two or three years ago. And so the hiring that we did disproportionately in 2024 really spoke to filling in those gaps. What we're now able to do in 2025 is layer in a more muscle in areas where we're already strong, certain sub verticals that we see. So we've got a full mapping of where we see the most promising opportunities to gain yet more wallet. And that's what we're doing. Raymond McGuire is leading our MD recruiting efforts on the advisory side doing an exceptional job, and we're getting a lot of traction and helps.
One thing success to get success and the fact that there is a sense of momentum and inflection really helps. And then the final thing I'd say is coming back to the distribution and productivity. We are very pleased with the progress that we've made in encouraging this commercial and collegial culture. It has resulted in two things.
One is a shift in the distribution of managing directors towards more productive ranges and that there are a lot of different pieces that go into that, the mix of people people that we've hired and some of the people that we've already company with shifting mandate selection and minimum fee requirements, the emphasis on legality all of that is working exceptionally well, and we're seeing the results. And I think that helps to explain a lot of what happened in 2024, and that's why we're optimistic about 2025.

Jim Mitchell

Okay, great. Thanks.

Operator

James Yaro, Goldman Sachs.

James Yaro

So I just want to start on secondary. Your secondary team recently put out industry report suggesting that 2024 secondary volumes were up by nearly 40% year-on-year. In their forecast for 2022, the growth slows notably year-on-year. I think in the central case, year-on-year growth, it's about 15%. A few questions here.
Maybe you could just help us think about your secondaries business and how it performed relative to those industry forecasts. And second is a very material contributor to results in the fourth quarter of this -- of 2024. And then finally, could you just comment on whether you are of the view that the growth rate in this business could slow in 2025?

Peter Orszag

So maybe I should combine the first and third because those are kind of related. And so here's what I would say. First of all, I believe that those growth rates were based on a survey of participants. So there's noise in the overall in the overall figures, I think the point instead to take away is that everyone is expecting continued expansion in the secondaries market.
And the reason for that is I think there has been a view that we just experienced a rapid growth in the secondary market only because the LPs were reluctant to sell portfolio companies -- and so there was a desire for liquidity that boosted the secondary market, both GP and -- sorry, the GPs were reluctant to sell the portfolio competed. -- boosted the demand for liquidity, both among GPs and especially LPs. I don't think that, that's actually the primary explanation of what's going to happen.
And therefore, if you took that view, you'd see a significant slowing as the sponsors became more active in selling companies back to the M&A discussion. But I don't think that, that's actually the primary explanation for what's going to happen over the next year or two.
Instead, the secondaries market has grown rapidly, but it's still affecting a very small share of the private equity world. And perhaps that spur from the need for short-term liquidity associated with fewer sales of portfolio companies help to be an accelerant to the market. But what it has done is it advertise the benefits of the structure to a wider array of sponsors. And so we anticipate continued growth in the overall market because people are now aware of this possibility and the attractiveness and depending -- it's very context dependent.
So our team -- and I think many market participants expect continued growth in the market. I'm not going to comment on survey-based growth rates. I think the dead point is -- we are anticipating continued growth in this market. And then on the question of Lazard's performance, we have a very strong PCA team, as you know.
The mix of business that they have between primary and secondaries has shifted towards secondaries a bit. We have a franchise leading practice in Europe also in this area out of Paris. And we see continued opportunities for Lazard to succeed. We have been very active on in this area over the past couple of months and see continued growth. So I think the market will continue to expand and Lazard is very well positioned under the leadership of Hope Green at PCA to capture additional share within.

James Yaro

Okay. That's very clear. Maybe just one more on the advisory revenue. You obviously had a nice sequential increase in the fourth quarter. Maybe you could just help us think about the trajectory for the first quarter? And specifically, was there any material pull forward that we saw in the fourth quarter I think in my numbers, the multiplier relative to geologic numbers for the fourth quarter was the highest since 2010.

Peter Orszag

Well, a few comments. So James, as you will remember, when I sat with you in mid-December, our best guess at that point was a lower -- somewhat lower number than the fourth quarter turned out to be. What really happened between mid-December and these results is that there were timing shifts, but they basically netted out to zero in terms of things that moved out of the quarter and into the quarter. come back to the pull forwards in a second, but relative to mid-December, those netted out to 0.
And all of the strengthened results reflect the things that we had at low probability or probability hitting very quickly. So I think it's reflective of a stronger overall environment. So that's point one. Point two is there were pull forward. You can see that in the geologic data but those were largely anticipated even as of mid-December, so they don't explain the delta relative to when you and I last that down.
And then with regard to year as a whole, as I've said, I'm not going to -- I'm not going to give any additional color on the quarter-by-quarter because it is -- it's not a linear process, and I don't -- actually, the experience that we just had over the past month and I we thought things would be a little bit lower in mid-December and then they strengthened just illustrates the uncertainty in the advisory business, but the overall picture, and I think that's the most important thing is one in which we see an increasingly constructive environment. and one in which Lazard is hitting its stride and gaining market share within that overall more constructive environment.

James Yaro

That's very helpful. One last one quickly, just on non-comp you had very good discipline in the quarter relative to the revenue. Maybe you could just speak to the noncomp growth trajectory from here and whether you might be able to continue to grow at the mid-single-digit growth rate that you saw for 2024.

Peter Orszag

So it may take those start.

Mary Betsch

So we were -- or yes, so you're talking about the fourth quarter, we had mid-single-digit growth year-over-year. I think that's probably a good proxy for the year ahead. We will continue to look for cost savings, but I think realistically, as we continue to invest in technology, including AI and cybersecurity, we've got continued pricing pressure and market data we've got continued increase in travel and convening events, and then we also have new buildings coming online in London and Germany. So when you look at all of that in totality, I think your estimate is probably pretty reasonable.

James Yaro

Thank you.

Operator

Aidan Hall, KBW.

Aidan Hall

Good morning, everyone. Maybe just following up there on the mid-single-digit noncomp guide, you comp guide for the year under the current revenue assumptions for $25 million I was just curious how you're thinking about the margins for both for the 2 businesses against the 23% in advisory this year and 24% in Asset Management just given where some of the hirings taking place and some of those dynamics playing out?

Peter Orszag

Well, what I would say is, again, we believe we can achieve our comp ratio objectives even while hiring at the rate that is embodied our 2030 plan. And again, the key to this all working is the ongoing improvements in productivity. We see a lot of room to continue pushing towards higher productivity levels. And that's what creates the room in the comp ratio to hire more productive bankers and bridge them over their kind of ramp period while they're getting up the productivity curve.
I'd also say we've got a few examples of people who are able to join the platform and become more productive quicker than in historical practice. That's fantastic, and that helps to that helps to even make the point more forcefully because then there's no bridging that's required or less bridging that's required. So that's, I think, the core point. And then the second 1 is, as we said repeatedly, if we have fantastic talent and we are seeing a lot of interest in the Lazard platform across the board.
We are willing to go above our targeted range on net additions for some period of time because we think it will pay off for our shareholders and for our ability to serve clients exceptionally well over the medium term. That may mean that the comp ratio gets elevated very temporarily to kind of bridge that transition period.
But ultimately, it will again lead to a shift in the overall distribution of productivity towards the more productive and that is core to reducing a lower comp ratio over time. So with regard to the margins, I think those kind of follow from the previous discussions on non-comp and comp combined. And we see an ability for us to continue to push productivity higher in the financial advisory side of the business and associated with that is ongoing revenue growth.

Aidan Hall

Got it. Okay. Understood. I appreciate the color. Maybe just switching gears on the asset management side of the business. The fee rate saw some nice sequential trends and I know there's some 3Q noise with a lumpy outflow. And then it sounds like the impact of sub-advised outflows in 4Q, making up half. So it was just -- curious if you could give us a little more color on the right way to think about the fee rate and maybe the answer is kind of in the pipeline fee rate right now as we think about some of that pipeline mandates being funded?

Peter Orszag

I'll let Evan take this. What I would say again is we highlighted that the $10 billion one, but not funded is in the 95% of revenue category. And those, on average, have higher fees than the sub-advised funds do, but I'll let Evan fill in additional color.

Evan Russo

Yes, Aidan, as you said, sequentially, average fee rate was up a tad. I mean, it's been pretty flat over the course of this year, drifting a little bit higher in the back end of this year. As you mentioned, we had a couple of larger client outflows, which were in lower fee products and platforms and then specifically geographically was some outflows in the US versus your set Japan yen, which are higher fee platforms.
It all comes down to that business mix, which drives the average fee rate across the entire platform. So a lot of ins and outs. I don't think the flows that come in around have that material impact in any given quarter, except when there are specifically large ones that will be significantly different than the average fee rate.
So in general, it's going to be just be the continued business mix shifts that we see in the business from quarter-to-quarter, which is performance of the funds as well as the overall level of assets and the proportion of those assets in the different asset classes in which the clients are investing. So that's the business mix is effectively makes up the average basis points, I'd say from here. I'd probably take the average rate for 2024, the average fee rate is probably a good rate to start the next year and then continue moving from there.

Operator

Ryan Kenny, Morgan Stanley.

Ryan Kenny

Hi, good morning. Want to dig in on productivity. Clearly, it's an important driver into the comp ratio improvement, and you surpassed your 2025 target of $8.5 million year early. So any thoughts on whether you can hit your 2028 target of $10 million per MD sooner? And is there a scenario that's realistic where you can surpass that bar this cycle?

Peter Orszag

Yes. We think we can surpass that bar and I would say we're ahead of schedule. We'd love to stay ahead of schedule. We see lots of opportunities for further uplift. And look, again, we've talked about this before, but what are the elements of this? It's we are benefiting from an ongoing improvement in the operating environment, we are benefiting from a phenomenon that I highlighted to you all before, which is that as we move into a higher growth scenario, there's a temporary depressant on productivity because the number of bankers entering the ramp of the kind of transition on to the platform exceeds the number of bankers exiting that ramp -- as we move through time, that phenomenon for that depressant erodes and goes to 0 because the number of new bankers even at the higher piece coming on to the ramp equals the number exiting the ramp. So we're benefiting from that. That is -- that is not entirely exhausted yet, but it will be over the next year or two. So there's a further uplift that will occur there. I mentioned things like mandate selection.
We again raised our minimum fee requirement to both reflect, I think, the exceptional work we do on behalf of clients that help us to really focus on the mandate selection. And then we have been, from a cultural perspective, really emphasizing, including explicitly measuring the degree of collegiality at a banker by banker level and rewarding that.
And I think that's paying off. We see positive correlations between more productive bankers and the more collaborative bankers, and we're going to keep pushing in that direction. And then finally, there's the mix of bankers themselves. We have parted company with a significant number of less productive bankers over the past 12 to 24 months, and we've added a lot of bankers that are already off to the races in terms of being both commercial and collegial.
So all of that is going to continue, and we see significant opportunity to continue raising productivity, and we certainly hope to remain ahead of schedule. And what I would say is even under the original plan, 10 was a as an objective, not a limit. And you should, I think, reasonably expect that we'll continue to aim to improve productivity beyond that level.

Ryan Kenny

Okay. Great. right. And then separately, you sound still very constructive even in a range of interest rate scenario where the forward look hasn't baked in as many rate cuts as we were originally expecting. So can you just give some color on, is there any impact at all on the pipeline if we get no rate cuts this year versus 1 or 2? And are elevated 10-year yields impacting the pipeline at all?

Peter Orszag

Yes. What I would say is, again, I think this is a secondary factor for most M&A discussions at the margin, would it help to have lower rates, sure. But it's not the primary driver of most deals, especially because to your point, the rate cuts haven't even been associated with a commensurate decline. In fact, it's got another direction, as you know, on the long end. In the long end, it's really what it's factored into the DCF analysis, et cetera.
So a rate cut that doesn't reduce the long end doesn't actually do very much for any of the M&A analytics or deal environment. So that's point one. Point 2 is that many of our other businesses, if you want to talk about secondary or kind of marginal effects from different rate environments, going other direction. So again, I don't think it's the primary driver of any of this. But with regard to our restructuring and liability management business, with regard to our secondaries business that we're just discussing.
I mean there are a bunch of things that even in that kind of secondary or tertiary phenomenon effects go in other direction. So -- we haven't done the analysis because I don't think we can. But I don't think the -- if you look at the overall impact of rate cuts on the advisory business, at this point, it is marginal overall because of those offsetting effects.
Final thing I'd say is, I think the market is appropriately reflecting what Chair Powell has been saying about the path of inflation. And yesterday, he made it very clear that they're going to wait for incoming data with regard to the path of inflation. -- it's a separate discussion we can have. But I think the most important thing is this is not the primary driver of the way the year will turn out overall.

Ryan Kenny

I will turn out. Thank you.

Operator

Mike Brown, Wells Fargo.

Mike Brown

Great. I just wanted to circle back on the share count, and maybe just put a little finer point on how to think about that for '25. So if we assume a flat share price would that mean you could keep the share count kind of flattish year-over-year? And obviously, hopefully, share price goes up, but just curious how to think about that in terms of maybe a framework for '25.

Mary Betsch

Yes, I'll take that one, Mike. So the 1 piece that you're missing is the buybacks, right, because we will have amortization come in throughout the year, which, as I said before, I think we'll be relatively stable versus last year. So if we were to buy back nothing or let's say, we bought back the level that we did in 2024, I think you'd see extracting the share price impact, you'd see a similar increase in the share count over the year. But given that we do plan to increase the buybacks to the extent that we're able to -- you'll see a mitigating impact there.

Mike Brown

Okay. Great. Okay. That's helpful. And then, Peter, maybe just a high-level question. I guess 1 thing that we've been focusing on is just this capital markets recovery, but on the IPO side, that recovery has been much more tepid and some of the recent IPOs that kind of underperformed and some have broken price. So it might be too early to tell how that market will progress from here.
But if the recovery is weaker or slower do you think that's a bit of a catalyst for M&A activity for your business? Does that just become a much more -- M&A just become a much more attractive exit strategy for sponsors and then some better M&A activity overall? Or in your view, is it kind of better to see that healthy IPO market, too?

Peter Orszag

What I would say is if you step back and look at the kind of reopening of the capital markets from relatively constrained environment that occurred a couple of years ago. The IPO market fully reopening is the final stage of that process. Everything else has already occurred. And so debt financing is generally pretty easily available.
The entry of private credit into that sphere has made the overall structure more competitive, et cetera. But yes, the IPO market fully reopening is the last stage. I don't -- I'm not surprised that there are a bit -- it's a bit kind of fits and starts before it fully reopens. I anticipate that with a stable operating environment, that will occur as we go through 2025.
And then, yes, I guess, at the margin, to the extent that a portfolio company can't IPO it upsides either that our secondaries business has that as a client or the GP associated with that or the LP associated with that company as clients or that there's a strategic or other sponsor that's interesting buying the company. So I think the bottom line is though, I anticipate the IPO market will kind of take hold in 2025, again, assuming that the operating environment is as we currently expect it to be. And then to your point, yes, to the extent it doesn't, that's probably a marginal benefit for various of our businesses.

Mike Brown

Thank you.

Operator

And ladies and gentlemen, this will bring us to the conclusion of Lazard's Fourth Quarter and Full Year 2024 Earnings Conference Call. We'd like to thank you all so much for joining us today and wish you all a great remainder of your day. Goodbye.