Q1 2021 Lazard Ltd Earnings Call
Okay.
Good morning, and welcome to the Lazard first quarter 2021 earnings conference call.
This call is being recorded currently all participants are in a listen only mode.
Following the remarks, we will conduct a question and answer session and instructions will be provided at that time.
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At this time I will turn the call over to Alexandra Deignan Lazard head of Investor Relations. Please go ahead.
Good morning, and welcome to Lazard and earnings call for the first quarter of 2020, one and Alexandra Deignan, the company's head of Investor Relations and corporate sustainability and addition to today's audio comments, we've posted our earnings release, and and Investor presentation, which you can access on our website a replay of this call will also be available on our website later today.
Before we begin let me remind you that we may make forward looking statements about our business and performance. There are important factors that could cause our actual results level of activity performance or achievements to differ materially from those expressed or implied by the forward looking statements, including but not limited to those factors discussed and the Companys SEC filings.
Which you can access on our website Lazard assumes no responsibility for the accuracy of completeness of these forward looking statements and assumes no duty to update these forward looking statements.
Today's discussion also includes certain non-GAAP financial measures that we believe are meaningful when evaluating the company's performance. A reconciliation of these non-GAAP financial measures to the comparable GAAP measures is provided in our earnings release and Investor presentation.
Hosting our call today of Kenneth Jacobs, <unk>, Chairman, and Chief Executive Officer, and Evan Russo Chief Financial Officer, Adam will start the discussion with an overview of our financial results and then Ken will provide his perspective on the outlook for our business. After that we'll open the call to questions I'll now turn the call over to Evan.
Good morning today, we reported a 15% increase and operating revenue for the first quarter with strong momentum and both financial advisory and asset management.
And the financial Advisory first quarter revenue of $317 million increased 8% from last year's period.
Reflecting broad based activity across the business our volume of publicly announced M&A transactions is up significantly from last year's first quarter, with particularly strong activity and the $1 billion to $10 billion range as well as in Europe.
The pace of new restructuring has moderated compared to last year, but we are experiencing increased activity in Europe as we expected.
Our capital Advisory business continues to grow both on a standalone basis advising clients on capital structure shareholder insights ESG and capital raising and that's an important component of our M&A and strategic advisory work, our global private capital franchise continues to be and high demand.
Serving financial sponsors with new fund, raising and innovative solutions and the expanding market for secondary transactions.
And asset management first quarter operating revenue of $328 million increased 22% from last year's period.
This reflected management fees on a larger base of assets under management as well as strong incentive fees, primarily from the European fixed income strategy and several alternative and local equity products.
As of March 31, we reported AUM at a record at a quarter and record level of $265 billion, 37% higher than last year's period, and 2% higher on a sequential basis.
Average AUM for the first quarter also reached a record high of $261 billion.
18% higher than a year ago, and 6% higher on a sequential basis.
As of April 23rd.
AUM increased to approximately $274 billion, driven primarily by market appreciation of $6 $7 billion.
The positive foreign exchange movement of $2 $7 billion, and net outflows of zero point $2 billion.
During the first quarter 1.7 billion and net outflows were driven primarily by the emerging markets and equity platform.
However, we achieved net inflows and a number of strategies led by convertibles International and global equities.
Hello, and gross inflows and the first quarter continued to be strong across our platforms rising for the fifth consecutive quarter.
Asset management has a healthy pipeline of unfunded mandates with growing demand for global and international equities as well as quantitative and alternative strategies.
We continue to invest for growth across the firm and asset management, we are investing in areas, where we see high growth potential including strategies focused on sustainability and ESG quantitative investing and alternative and thematic strategies, we continue to launch funds and seed new strategies to meet investor demand.
We are executing on our strategy to expand our platforms with roll ups of investment teams.
Yesterday, we announced an expansion of our alternatives platform with the addition of a long short team focused on the technology media and telecom sector.
In financial Advisory we are focused on growth opportunities. We plan a significant number of senior hires this year and we have been intensifying of coverage of private equity sponsors.
Senior hires and our private capital and financial sponsor coverage teams in 2020 are already delivering increased contribution to our revenues in 2020 one.
At the corporate level and February we launched Lazard growth acquisition Corp. One.
A spec that raised $575 million, we see significant opportunities and the spec market and are focusing on sectors, where we have competitive industry expertise and strong networks.
Now turning to expenses and the first quarter, we accrued compensation expense and a 59, 5% adjusted compensation ratio compared to 60 per cent and the first quarter of last year.
Non compensation expenses were 9% lower than the same period last year, reflecting continued lower travel and business development costs.
Our adjusted non compensation ratio for the first quarter was 15, 8% compared to 20% and the first quarter of last year.
Regarding taxes, our effective tax rate and the first quarter as adjusted was 28, 6% in line with last year's first quarter. We expect this year's annual effective tax rate to be in the mid 20 per cent range.
We continue to generate strong cash flow, which supports return of capital to shareholders and the first quarter, we returned $237 million, including $49 million and dividends and $123 million and share repurchases.
During the first quarter, we bought back two 9 million shares of our common stock at an average price of $42 30 per share.
These repurchases effectively offset potential dilution from our 2020 year and equity grants.
Yesterday, we declared a quarterly dividend on our common stock of <unk> 47 per share and going forward, we expect to use excess cash flow toward increased share repurchases.
Yesterday, our board of directors authorized of $300 million increase and our share repurchase authorization. Our total outstanding share repurchase authorization is now $439 million.
To summarize our quarterly results underscore the strength and stability of our model and the continued high performance of our businesses.
Ken will now provide perspective on our outlook.
Thanks, and then the global macroeconomic environment continues to improve creating tailwind from both of our businesses unprecedented fiscal and monetary stimulus and major economies and laying the foundation for a strong economic growth globally in 2020, one and the into 2022, well the uncertainty still exists around the of course of the pandemic the vaccine role.
And the developed world is raising expectations of the health crisis can be contained this outlook combined with recovery and the real economy, and improving proving growth forecast and boosting confidence among Ceos boards and investors and.
Of course, as driving global strategic activity remain in place technology, driven disruption and continues to be of catalyst for M&A across industries, and the global drive to reduce carbon emissions and emerging catalyst for strategic activity.
Shareholder activism is increasing after a brief pause and 2020 sectors that were battered by the pandemic of recovery and the proliferation of stocks alongside strategic and private capital has had substantial dry powder to and the M&A market.
And this isn't as good and the M&A environment, as we've ever seen and whereas access it as we've ever been.
Our financial advisory businesses, and an excellent competitive position and we expect our pace of transaction closings to increase over the course of the next few quarters and asset management low interest rates continue to drive demand for risk assets, including equities and corporate and emerging market debt as well as the alternative investments and institutional investors continue to seek sourcing.
And to differentiate the alpha and.
And the ESG thematic and alternative strategies, our asset management business is well positioned in this environment with a diverse of what range of innovative strategies and solutions for a sophisticated client base, we enter the second quarter with a record level of assets under management and market conditions that are increasingly favorable for global.
Active management and <unk>.
Health crisis begins to recede and Pete and down sectors recover we're seeing a greater emphasis on valuation based investing overall remain we remain focused on serving our clients well, while we manage the firm for profitable growth and shareholder value over the long run in closing I want to thank all of my Lazard and colleagues for their extraordinary.
Efforts during this period of accelerating activity, even as many of you work remotely and challenging conditions, you were making a real impact as we return to the office and greater numbers. The lesson learned the lessons learned during the past year will help us create a more flexible workplace and benefits the perm and all of our stakeholders.
Now, let's open the call to questions.
Thank you.
If you'd like to ask a question. Please signal by pressing star one on the telephone keypad.
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Cigna, a chance to reach our equipment again press star one to ask the question when the pause for just one moment.
Okay.
[laughter].
We'll now take our first question from Manav Ghazaliyah from Morgan Stanley. Please go ahead.
Hi, good morning.
Hi.
Hey, and it looks like M&A activity is picking up nicely in Europe.
Can you give us some more color on what Youre seeing there and you know if youre seeing more interest and.
Larger deals and you were seeing before and maybe also how sustainable do you think of that level of activity is.
Sure. So I think youre right that is what we're seeing as well we're starting to see of real pick up of activity of Europe is lagging the U S a little bit obviously because of.
The health crisis has probably delayed things a bit but we.
We feel a nice we're looking at a nice increase and activity levels across our franchise in Europe. The.
And actual sponsors sector is probably the first area to recover we're seeing more strategic activity more cell sites.
And by some of the larger companies and those are you know obviously, attracting some strategic activity as well. So it is improving also of the restructuring market has picked up as well and Europe over the course of the next several months or so so we make it for the benefit of vote.
Great. Thank you.
And he will now take our next question from Richard Ramsden from Goldman Sachs. Please go ahead.
Hey, Richard.
Hey, good morning.
So obviously, a very strong environment of.
The M&A broadly it looks like Q1 is going to be a record full announced M&A. So I thought I'd ask a question about risks to the run rate and I guess of couple of things because there's obviously of corporate tax reform does seem to be gaining momentum and the U S. But I assume it's going to be a global phenomenon, but secondly, the market is now pricing and I think a series of interest rate hikes studying.
And 2022 accelerating into 2023, who.
So could you talk about both of those and whether all of you think that those could slow the the rate of activity as we progressed through the course of the year. Thanks a lot.
Sure Great question, so low.
Look we tend to look at it in simple terms of the M&A market as a function of.
Although the of financing.
Evaluations.
The confidence level of amongst Ceos boards.
Investors and and very importantly, what are the catalysts.
Today, and frankly financing is available as ever I think as you get higher interest rates, it really depends on whether or not that chokes off of the Nancy if youre in a reasonably strong economic environment unlikely to be the case. So that's something to keep an eye on but I think you know the.
The economic environment, probably remained strong through 'twenty two.
So that probably means that we're in a reasonable financing environment then.
Equity valuations look they are a little over the master of sectors that are you did but then you see more equity being used in other sectors. There are others that have been behind and cash is still a very effective way to make deals work confidence levels are really improving with the improvements in the economic outlook.
And that should be sustainable for a while and then the other piece that I think is the real driver of M&A activity as the catalysts and <unk>.
Here, we've got a couple of now one is been in place now for the last year or so which is this.
Technological change across every industry and the need to really improve competitive positions through M&A.
The 222 to adjust for that and and the second which is the neuro, one, which we're starting to see quite of bit of activity around and especially in Europe.
<unk> is around the move towards a carbon free and world and the adjustments that need to take place around that.
And the investments in core businesses, our new businesses to better position. So I think those are going to be fundamentally strong factors. Obviously, if we start to see interest rates rise and markets close that's something to keep an eye on but for the moment it feels pretty good and the fed and the central banks across the world of very focused on.
And keeping those those markets open.
Tax rates.
Look it's a little early to know I think.
By and large the corporate tax rate, probably ends up going up a bit but that doesn't look like it's going to have much impact on activity levels personal tax rates, a little more uncertain as to what happens there and obviously big moving capital gains could have some shorter term or medium term impact on the market.
And then the global tax rate, that's probably much further out because that probably of besides the I understand it requires renegotiation of tax treaty. So it's not probably something that we start to feel the impact on in 'twenty, and 'twenty, one or even into 2020 two.
Okay. Thanks, very much the very helpful.
We will now take our next question from <unk> <unk> from Credit Suisse. Please go ahead.
Good morning can you please expand on the longer term strategy to increase market share with sponsors.
Sure.
Look this is an area, where I think we were underrepresented.
Over the course of the last several years of the white space for us not a complete white space and we've had the activity there but I.
I think improved our coverage and focused effort there over the course of the last year, we've made some hires.
Last year on that.
And we continue doing that into this year of refocus some coverage and it's an area where I think we've got some real ability to improve market share.
Thank you for taking my question.
Sure.
We will now take our next question from.
Brennan Hawken from UBS. Please go ahead, hi Brennan.
Yes.
Hi, good morning.
Thanks for taking my questions. So.
Okay.
The the.
The the.
The advisory revenue came in softer than we were looking for and I know.
A lot of the commentary.
And is around the strength in the environment. So I'm, just hoping you could maybe give a little color on what.
What the disconnect is was it I know, it's the chunky business restructuring is a big part of a lot of our expectations I think of that and we have had visibility into that with the public data. So.
And do we need to dial back of the restructuring expectations or was the one Q the.
Softer than expected once you advisory revenue and more about timing.
Timing, rather than and I guess, if you could maybe give a little color that'd be great. Yeah, Let me make it simple for you.
This is of course this is the business where it quarter by quarter is a little hard to sort of judges you can see from quarters and the past and I expect will be the case and quarters in the future.
That said, let me make it simple activity level.
This is as good of market and M&A as we and I think our competitors of <unk> for a long time the fund raising market is really quite good as well for our private fund raising business.
In terms of activity levels. This is as busy as I can remember.
And in terms of completions, we expect them to accelerate over the course of the year.
And to make it even easier I would expect the second quarter is going to be better than the first and the second half will be better than the first half of.
This should be of Goodyear.
Okay.
Thanks for that.
And if you wanted to follow up on something else and feel free.
Sure well I mean, I guess, what what I would ask is on the restructuring side in the past. This is the we can always watch the the public data on the M&A, So that's a little bit easier to track.
But you had a lot of comments about how Europe was starting to come on with restructuring and I'm kind of curious whether or not you think that that is.
And that outlook remains robust or are we starting to see I know a lot of investors that have started to get excited about was our of chairs. You recently it is predicated on strength and Europe Europe, beginning their recoveries and the rollout of the vaccine seems lagged and the U S. So you know the.
A lot of that recovery is still on the come.
Is that going to take.
Take a little away from the European restructuring not that that's a bad thing and you're just trading him and paper for restructuring, but how.
How is that guy and I've worked out and and ease of the restructuring outlook and Europe still as robust as you thought it was towards the end of last year.
Okay. So, let's let's talk about restructuring and then I'll move on to Europe U.
U S restructuring will be down from last year.
Sylvia the elevated levels and.
And in an environment, where you wouldn't expect that but that's our anticipation in terms of Europe the restructuring market is improving.
At the time at the same time that the M&A market is improving.
I would take the M&A market improvement any day of or improvement in the restructuring market.
And I think this is a nice combination to have I would expect that Europe is going to do better this year than it is.
The last year.
Across the board.
And and that that European comment is that is that on the M&A front, specifically or sort of comment.
Well I would say I would expect M&A is going to do better.
And I would expect the restructuring business is going to do better and.
And I would expect that the business as a whole will do better.
But that certainly is clear.
Okay and.
One more if I might.
Sure the.
So you guys had a good the.
The performance fees and your asset management business a lot of Oh.
Which is great right.
It's certainly money in the pocket EPS and cash, but a lot of investors will adjust for that because it's so lumpy and and not as a as predictable and so when you look at the core fee rate and that business it was weaker than than we've seen and and certainly.
A lot of asset manager and here's the public peers that you guys have have shown a more constructive fee rate dynamic given some of the beta dynamics that we've seen emerging markets and done well global equity markets really quite strong with the some weakness and fixed income.
Can you maybe help us unpack a little bit of of how your fee rate this quarter diverged from that and is there any noise in there or.
Are you guys just.
<unk> seen some different cross currents given the idiosyncratic and makeup of your book of business.
Great questions, So let's start with the.
Performance fees, I mean look I view of performance fees at this time of year in the places where we've had them as a good thing.
It shows a nice pattern of performance in areas, where we'd like to happen.
He was unambiguous positive.
Second is.
There's a over time theres going to be a little bit of of tradeoffs between management fee and performance fee. I mean, everybody is negotiating new fee arrangements around that so I wouldn't be surprised if we see a little bit more of that and the future that would again be probably a good thing.
In terms of the.
Expectation versus where basis points come in and May look I think it's one basis point or something so it's a little noise and there quarter to quarter that said again, if you look at where we've had our outflows this quarter, it's been and our emerging market platform, which obviously is a higher fee platform and the inflows are in areas, which are a little bit.
Which on balance are probably lower lower fee areas, I think and the long run and this will just balance itself out quarter to quarter you see the kind of effect you have year overall I think the thing that we're pretty focused on the at the moment is that the gross flows have had five consecutive quarters of increase which is.
Which is quite important.
And then second is we're getting a lot of traction as we've talked about and the pass on.
And this rollout of platforms onto our alternative and <unk>.
Of our alternatives business and and into other parts of the asset management business is this something which I think is pretty exciting and the moment for us.
Okay. So so the.
As far as unpacking the fee rate dynamic to paraphrase. The flows were actually Oh, the beta dynamic where offs more than offset by some flow mixing that youre seeing inside the business.
Yeah, and look I mean, there's going to be pressure on fees and active management across the board for us and all of our competitors for the foreseeable future. That's just the dynamic of the business right now that said I think you know.
We've experienced a lot of pressure from outflows and unit.
One particular strategy that it was at a particularly high fee rate within the within our mix of business and we're replacing it as we've said with.
With the strategies, which tend to come in at the lower fee rates that that dynamic is as big and play now for almost two and a half years.
We're getting to the end of it.
Oh, great. Thanks for the patients with all of the follow ups Oh, no. It's fine and those are all good questions. Thank you.
Yeah.
And I would take our next question from Devin Ryan from JMP Securities. Please go ahead.
Hey, great good morning, everyone.
Hi, Devin.
Hey, maybe to the shift gears, a little bit on the questioning and and just talk about expenses for a moment here. So clearly non compensation costs remain very low and I know, there's probably a little bit of seasonality in there and then theres some other.
And just noise as there always is on a quarterly basis, but I'd love to just think about some of the parameters moving forward for non compensation. Just you know as you obviously Europe starts to reopen behind the U S and and more broadly reopening plans occur.
And and also potentially of business activity levels pick up because I'm just trying to think through.
The moving parts of your because clearly you know the given your advisory commentary.
You know a lower non compensation run rate relative to history.
And would be pretty bullish for margin and so I just want to think that through all of it.
Sure and then you want to take that absolutely.
Kevin how are you, let's let's talk a little about non comp generally in the quarter. We've got obviously of low lower non comp as we called out related to marketing and business development as you can imagine travel in Q1.
Similar to the end of last year was much lower than it was and the previous year or so of travel was down approximately $10 million on a year over year basis, offset a little bit by some of the increases we've seen in and technology and sort of the other investments we've been making and the non comp line. When you kind of look out and if you kind of trying to think about activity levels and the impact that that's going to.
And on non comp going through the year look we would expect to start to see some of our T. N E and business development expenses start to move up just a little bit probably not that much and Q2, but we're starting to see a little bit more travel. We're hearing more from clients. We're hearing more from bankers going back to the office wanting to have more meetings in person and so that's starting to happen.
I'd say its still a pretty low level for Q2, I would expect the back half of the year, we'll start to see that ramp up a little bit, but when I think out longer term and I think if and when I say the back half of the year. The back half of the year I think we'll start to see it grow a lot of the costs associated with T and he has global travel international travel and things like that which I still think of gonna be probably.
Still pretty slow for the rest of the year given the global environment not just the U S environment. When you think out sort of of the next year or so and as we've said before we would expect to see non compensation and benefits associated with sort of a lower absolute marketing and business development cost because I don't think we ever fully get back to the same pre pandemic level of spend that we had.
And the sort of T and E market I think we'll probably get back I think of our best estimate and our guests guess best guess at this point is probably will get to like 70 to 80 per cent and mostly that is driven by the fact that clients and bankers and everybody else around the sort of system of transactions has learned to do things differently. There's so much more efficiency built into the system today, our clients are just more of.
Comfortable so it doesn't mean, there's not going to be a lot more travel a lot more of sort of focus even when transactions come back just the the way in which we transact will likely mean less and person and we had before so and if you were doing four of five meetings, you're probably going to do three or four instead for the same type of transactions and I think there will be sort of benefit. So when you think about this year, it's sort of a C.
And the low in Q1 are going to pick up as we started to get to the middle of the year and probably ramp a little bit higher when we get to the Q3 and Q4 of them a travel basis.
Alright, great all very helpful. Thank you.
We will now take our next question from Stephen and shoe back from Wolfe Research. Please go ahead.
Hi, Stephen Hi, good morning.
Morning, So I just wanted to ask the question.
The asset management strategy is based on the size and diversity of your backlog at the mall of Bad do you think youre getting closer to more consistent quarterly net inflows and can you maybe just speak to your appetite for.
For additional lift outs and that sounds like an area of pretty excited about it and how much AUM is coming with the new T. M. P. J.
Okay.
So let's start with the strategy and then come back to the the flows fees they're somewhat related.
What we're seeing is look there is what.
What we see with our asset management businesses.
There's there's real benefits to the scale of our business right. Now that is we have a global platform great distribution on the institutional side improving distribution across our retail platform.
<unk> systems around compliance.
The good systems and such so.
When we look at and also of the scale, where the kind of editions of the teams to our platform makes the difference to our franchise, whereas if you know virtually into Chile and asset manager of these these kind of additions probably wouldn't move the needle and for firms that are smaller than us and I'm not sure. They have the scale in terms of.
Distribution or the.
Ability around platform, whether it's through compliance or technology and such to accommodate the the.
Addition of teams like this so we're very good home for or a very good place for this kind of strategy the asset management business has.
The the changes and asset management have called Us and then.
I'll just read across the industry as we all know but in.
And for smaller firms, it's made it made life of much tougher.
And it's harder to get across the finish line on compliance and of Nike and all of the other things and it also is increasingly difficult as the result of that to get inflows. So theres a lot of disarray with the smaller teams that are out there whether it's among hedge funds are a smaller asset managers. So the ability to attract teams like that today on good terms were.
You know theres very little goodwill paid or attractive economic terms, both for us and for those teams.
It is quite high at the moment and and we see of real ability to rollout those teams and we're getting better at it.
And many times they come with assets under management, and then we're able to accelerated which makes it particularly attractive so that's the strategy.
We're now five or six quarters into it.
And we expect this to continue for us going forward and the key of course is launching the strategy successfully getting assets and insights. So that's that's the approach as far as the.
The point at which we go from this.
Stained period of of outflows I mean, they haven't been awful, but it's obviously been several quarters.
So of inflows and I'm, hoping we're newer and newer to the inflection point, we've said that over the course of the next several months or so you know we expect to for that to improve gross inflows and as you can see have been really improving over the last five or six quarters.
And and on top of that I think we're starting to see.
The bottom here on some of the outflows and some of the in the strategies of strategy. That's been most of at risk and part because of performance in part because of just the size and the and and the environment shifting for four for the business. So that's kind of where we are at the moment.
That's great color guys and thanks for taking my question.
Sure.
We were low would take our next question from Jeff Harte from Piper Sandler. Please go ahead.
Hey, good morning, guys.
Wanted to touch a bit on capital is most of the income statements stuff's been covered buyback was higher than at least we were expecting this quarter, but I still look at the balance sheet is just having an awful lot of cash on it and if the environment is getting better and better it would seem that cash balance is going to grow.
How are you thinking about more of a sustained meaningful increase and the buyback are you open to it how much or is it something you're going to wait for the revenue show up and you talked a bit about that.
And then you want to take that absolutely Hey, Jeff.
With regards to share repurchases. We said we bought back two 9 million shares in Q1 of this year after really stopping to do share repurchases for most of the end of 2020 for the sake of conserving cash and you're right. We went into year and with a higher level of cash because of the strengthening of the business as we said.
We were going to offset dilution and bought back enough shares to offset dilution of more than offset that and Q1, and we would expect to start using some of that excess cash over the next you know quarter or two to try to get back down to something more normalized level. So I think you'd expect to see us continue doing share repurchases in Q2, and Q3 to kind of offset that again, assuming the <unk>.
And this continues to strengthen the environment feels pretty good I think of as our confidence level of coming out of the pandemic continues we're going to work down the excess cash we have on the balance sheet.
You mentioned two of cash flow more normalized levels of can you give us any kind of feel of what what level you think that is.
Yeah, it's hard to say quarter to quarter. I mean this is if you kind of look at last year kind of look at back of where we've been over the last the two or three Q1s, that's sort of the normalized level I'd say, it's sort of what we're seeing here. So we're probably a little bit higher and it's hard to give an exact number at any point in time, but you know if I said about 100 million, maybe a little bit more than that.
It certainly feels like it's the right level at this point and time that we'll try to put to work and the AR in the coming quarter.
Okay. Thank you.
And.
We were low tech or our next question from Jim Mitchell from Seaport Global Securities. Please go ahead.
Hey, good morning.
I think and the prepared remarks, Evan mentioned that you guys were looking to make a significant number of of hires and advisory. So can you maybe talk about I guess, where that investment is most focused and if that has any implications for your ability to get at.
Operating leverage on comp at least as the as they ramp up as that put us at the significant enough that it puts a little pressure on the comp ratio of how do we think about that investment spend.
Look big picture.
We see a lot of opportunity for growth and our business.
And there's quite a feel there are fair number of places, where we would like to fill white space and also some new business lines that we see is complementing our core business, we on the advisory side of the moment.
And so we've got a pipeline of a couple of higher.
Several senior hires that.
We expect to be able to complete over the course of the next several months or so.
And then my guess is this is going to accelerate into 2022.
And look you know the impact on comp ratio is always a function of.
And what's going on and the business and the current year I think it's as revenues and accelerated obviously diminished if they don't or and weaker environment and obviously it has the bigger impact, but this is a pretty good environment and we should be able to absorb it well at the more junior ranks I mean, we like everyone else are trying to find a way to deal with the.
Given the levels of these very high activity levels and real demands on our on our staffing and and we're doing everything we can to improve that at the moment.
Okay. Thanks.
As there are no more questions and the queue. This concludes lazard and first quarter call. Thank you.
Thank you.
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