Good morning and welcome to Lazard's Second Quarter and First Half 2021 Earnings Conference Call. This call is being recorded. Currently, all participants are in listen-only mode. Following the remarks, we will conduct a question and answer session. Instructions will be provided at that time. [Operator Instructions] At this time, I would like to turn the call over to Alexandra Deignan, Lazard's Head of Investor Relations. Please go ahead.

Good morning and thank you for joining us today on Lazard's earnings call for the second quarter and first half of 2021. I am Alexandra Deignan, the company's Head of Investor Relations and Corporate Sustainability. In addition to today's audio comments, we posted our earnings release and an 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 in the company's SEC filings, which you can access on our website. Lazard assumes no responsibility for the accuracy or 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 are Kenneth Jacobs, Lazard's Chairman and Chief Executive Officer; and Evan Russo, Chief Financial Officer. Evan will start the discussion with an overview of our financial results, 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 record operating revenue for the second quarter and first half of 2021, driven by strong results across the firm. Second quarter revenue was a record $821 million, up 51% from a year ago, and first half revenue was a record $1.5 billion, up 33% from a year ago. Revenue for the last 12 months was a record $2.9 billion. This high performance underscores the strength of our franchise and the breadth and depth of our business. In financial advisory, record second quarter revenue of $471 million increased 61% from last year's period, reflecting broad based activity across sectors, market cap and regions. M&A completions in the second quarter increased substantially in the Americas, Europe and Asia as did private equity transactions. Our advisory revenue reflects a growing percentage of financial sponsor activity. Our Global Private Capital Advisory franchise also had a strong quarter serving financial sponsors with new fundraising and innovative secondary market solutions. Our second quarter restructuring revenue was down from last year's elevated level, and we expect lower levels of restructuring to continue in the second half of the year, given the strong liquidity across markets. Our sovereign and capital markets businesses continue to be active, advising governments and corporations on financing strategy and capital raising. Overall, our advisory business is experiencing unprecedented activity levels. Assuming current macroeconomic conditions, as we said last quarter, we expect that our Financial Advisory revenue in the second half of 2021 will be higher than the first half. Asset Management operating revenue reached an all time high for the quarter and first half of the year with second quarter revenue of $343 million, up 40% from a year ago. This reflected management fees on a larger base of assets under management, as well as strong incentive fees,…

Thank you, Evan. The global macroeconomic environment continues to strengthen and market conditions remain excellent for both our businesses. Even as the course of the pandemic remains uncertain, business conditions in most of the developed world are normalizing. Economic recovery continues to be underpinned by unprecedented support from central banks and fiscal policy. As CEOs, boards and investors look past the short-term uncertainties, they are increasingly confident in the longer-term outlook. The forces driving global strategic activity remain in place. Technology driven disruption continues to be a catalyst for M&A across industries. The global push to lower carbon emissions is an emerging catalyst. The pandemic is driving structural changes in the real economy, shareholder activism continues to evolve globally, and there's an abundance of private capital being put to work alongside strategic capital and specs. Our advisory business is in high demand in this environment. We are serving clients with the most sophisticated capabilities and deep insights into local markets reinforced by expertise from global sector and specialty teams. In Asset Management, we entered the second half of the year with a record level of assets under management. Low interest rates continue to drive demand for risk assets, including equities and corporate and emerging market debt as well as alternative investments. Institutional investors continue to seek sources of differentiated alpha. Our Asset Management business is especially well positioned in this environment with a diverse array of innovative strategies and solutions for a sophisticated client base. We see significant opportunities for productive growth across our businesses and we continue to invest in people, capabilities, technology infrastructure to enhance our competitive edge. We remained focused on serving our clients well while managing the firm for profitable growth and shareholder value over the long-term. Lazard's people are returning to the office and meeting client’s in-person with greater regularity, which is boosting spirits across the firm. Even as we hope for a continued lifting of quarantines and travel restrictions, we have proven our ability to serve clients in both fully remote and hybrid environments. In closing, I want to thank all my Lazard colleagues for their perseverance and dedication during these unprecedented times. They are serving our clients with outstanding financial advice and solutions and they continue to be remarkably productive. They are proving day-in and day-out that Lazard's greatest asset is our people. Now, let's open the call to questions.

[Operator Instructions] We can now take the first question from Devin Ryan of JMP Securities.

Great, good morning everyone.

Hi, Devin.

First question is just on Europe and what you guys are seeing there, I guess, near-term, and then also kind of the bigger picture maybe longer-term opportunity and I guess where I'm coming from here is if we look at European M&A volumes kind of post-financial crisis, they dropped by roughly half and never really fully recovered. And it sounds like you're seeing maybe what feels like a more durable recovery there and we're in the early innings of that, or at least that's what it feels like. And so, I'm just kind of curious how you would frame the potential for recovery in Europe. And if there is any quantification that you can provide whether it's productivity of European managing directors relative to North America or kind of the level of upside that you think we could see to the extent there is a more sustained recovery there.

So the short answer is yes. We're seeing a significant recovery in Europe right now and across the board it's not limited to one country. We're pretty much seeing it across the board in Europe. It's a pretty healthy recovery because it's not really driven by just a couple of big transactions. There is obviously a fair number of reasonable sized transactions, but we're seeing an enormous amount of sponsor activity, which we're playing a significant role in. And we're also seeing a fair number of mid-sized M&A by strategic as well. And we think this is going to continue. One of the key drivers in Europe, which is going to underpin a lot of the activity there in the years going forward, is going to be the decarbonisation that's going on in the economy generally, I think European companies are particularly attuned to this and are repositioning quite quickly to take advantage of in some cases, repositioned in other cases what's going on in the economy. But generally speaking, it's a healthy recovery. At the core of it is probably the sponsor activity, which is across Europe right now. We've got strong private debt markets, which are helping that thrive and they should continue for a while. On productivity measures, I would say the fee levels in Europe are still not where they are in the United States, but at the same time I'd say our productivity numbers are looking more and more similar to what we've seen in the U.S. and that's the first time in a long time.

Yes, okay, terrific color. Thanks, Ken. And just too follow-up on capital return and capacity and nice to see healthy buyback in the second quarter, it sounds like there is still an appetite there. And I don't know if there is any other frameworks to think about kind of capacity for capital return and preference between buybacks or even thinking about specials as capital hopefully builds throughout the remainder of the year.

Evan, do you want to take that?

Of course, of course. Yes, I would say the – to the second part of your question, Devin, we're definitely more focused on share repurchases than we are on the special dividend as we have for the last couple of years, that consistency in which we've put more capital to work in share repurchases. And as you said, look, we bought back 2.4 million shares in this quarter. What we were trying to do is sort of spend down the excess cash. We sort of hinted to that last quarter that we were going to try to buy around $100 million. We spent about $111 million buying back shares this quarter on top of the 2.9 million shares we bought back in the first quarter. So, obviously, getting a lot of share repurchase done earlier in the year. As we said, we're going to continue to focus on share repurchases throughout the rest of the year through the excess cash that we're generating in the business, probably more leaning towards the Q4 timeframe, given the amount we already bought back this year, but we'll see, it depends on cash generation, the excess cash flow in the business. And as we always do, we'll return it back to shareholders.

Yes, okay, terrific. I'll leave it there. Thank you guys.

Great.

We can now take the next question from Manan Gosalia from Morgan Stanley.

Hi, good morning.

Good morning.

Yes, so, clearly, a strong quarter here by any measure. Can you give us a little bit more color on maybe what drove the Advisory revenues this quarter? I mean, obviously, M&A is firing on all cylinders, but how much debt restructuring and capital markets advisory contribute to the trend this quarter?

Sure. So this was an M&A quarter clearly, restructurings off compared to last year and the restructuring climbing is more muted than obviously it was at the beginning of the pandemic given the very strong credit conditions. And it's probably going to stay that way over the course of the next several quarters, unless we see some weakness in some of the sectors that we're counting on a recovery, a strong recovery that could be travel, leisure, et cetera, interrupted by the pandemic. But generally speaking, this is an M&A – this has been driven by M&A and the rest of the year should as well. What we're seeing in the M&A markets is just – at least for Lazard, it's broad based. We're seeing it across geographies U.S., Europe. We're seeing across the industry groups, virtually every industry group firing. And what's particularly gratifying right now is the breadth of the origination at Lazard across the firm. It is historically like most places you get a lot of concentration. Here I've never seen at this broad at Lazard in the whole time I've been here and that's very gratifying and very encouraging. I think one of the areas where we've seen a big pickup in activity, which we expect into the future, is in sell sides and in coverage of private equity. And that's something which we pivoted to, I'd say, about a year and a half, two years ago, and it's really starting to pay off right now.

Great. Just maybe as a follow-up to that, how is macro environment factoring into client conversations? Europe, as you noted, is rebounding nicely, but there is heightened concerns around the Delta variant and the U.S. there – there are concerns around antitrust and the likelihood that tax rates will move up next year. What's the level of, I guess, urgency you're seeing from clients in pushing deals through by year-end?

Okay. So look, each of them have different what I would describe as someone's cliental effect and the antitrust discussion, this is not new. This has been hanging over the sophisticated part of the market now from several months before the election, post-election, and obviously getting a lot more public attention now, but there really aren't a lot of surprises about the choices that have been made in terms of antitrust roles in this administration. And so this heightened focus is something that I think has been anticipated by many of the larger companies. And you can kind of see it in the nature of the deals that have either been interrupted, obviously, but the ones that either haven't taken place or for that matter even the ones that have taken place probably more of awareness about a more difficult environment for consolidating very visible, very big transactions. That's where the focus is likely to be on the regular way stuff that we're seeing. The activity that's really driving the M&A sequel right now, they're – that's not likely to have is – this kind of enforcement is not likely to have as much impact there, but look it's something that we all have to pay attention to. With regard to the Delta variant, obviously that's a great concern from a health standpoint globally. But one thing that is increasingly apparent is that all of them in the developed world, the major economies are just getting in businesses and people are just getting better and better at adjusting to these interruptions. This is going to be something we're going to be living with for a long time. And I think increasingly businesses are adapting to that. There are going to be parts of industry, I'd say, travel, leisure, entertainment that are at more risk than other parts because of this, but that's a concentrated part of the economy. I don't think it's going to be as broad based, but obviously if we start to see another variant that starts to interrupt the ability of the vaccines to be effective, that's a different landscape. But for now it's manageable. And I forgot the third question you had, there were three parts to it.

No, no, that was it. I appreciate it. That's a great color. Thank you.

Good, good.

We can now take the next question from Steven Chubak from Wolfe Research.

Hi, good morning.

Hi, Steven.

Hi, Ken. I was just hoping to dig a little bit deeper into some of the comments you made relating to sponsor activity. Some of your competitors are perceived to have more exposure to this area, but I think it's pretty evident based on the backlog trends and some of the deal announcements that you have a really strong sponsor franchise. I was hoping you can give some context as to how you stack up relative to some of your peers and just the broader, and jus the strength of your relationships with some financial sponsors, given how much activity we're expecting in that space.

Okay. So look I don't really have a detailed view of how our peers line up there and I'm not really – I don't usually like commenting on them. So I'll focus my remarks on us. First of all, we've always had a very strong sponsor business in Europe that, that's been an area where probably our sponsor revenues have historically matched the market revenues. And especially the case on the continent, it strengthened recently in the UK. In the U.S. even though we were very early to sort of the mid-market sponsor universe with our foray – our acquisition of Goldsmith Agio about a decade ago. I think we were up until about a couple of years ago, under index relative to the people there. And over the last couple of years, we've been pivoting quite a bit of attention in resource to covering that market in the U.S. and it's really starting to pay off. And that's something which I think will continue to drive activity going forward. In addition to that, obviously we have a very strong fundraising group. Our Private Capital Advisory Group is really one of the premier groups on the street. And that combined with our focus on private equity, that group, which has given us tremendous insight into what's happening in that market and has been really at the cutting edge and pioneering many of the transactions that are taking place in the secondary market. Some of these continuation funds is really given us a boost in this marketplace as well.

Now, thanks for that color, Ken. And for my follow-up, I just wanted to ask on the SPAC capital that needs to be deployed, about that as a potential tailwinds activity. Tell me that's [indiscernible] growing increasingly skeptical that the significant amount of SPAC fundraising that we've seen is just chasing a dearth of quality targets and was hoping you could just share some of your own perspective on how you see that unfolding and maybe the implications for the SPAC is being used as a vehicle more broadly as a way to engage in M&A activity?

Sure. So this SPAC market is going to evolve. I mean, we've already seen the evolution of the market over the last several months or so. If it survives, which I think it will there will be a lot closer – what I'd say scrutiny of it by the – by regulators and by market participants. But assuming it continues to evolve and survives, which I expect it will, it's going to become more institutional in nature. The players that are going to be most successful are going to be the ones with the most sophistication, the most resource, the best ability to do due diligence and such. And I think that's going to improve both the quality of the deals that get done, and it will also shift over time, I think the targets. I think what we're going to see over time is the shift in targets to be something that looks a little bit more like what's traditionally done in the IPO markets. You'll see probably more established companies. You'll probably see corporate carve-outs, you'll probably see the SPAC being used as a vehicle to allow a couple of – two private companies to merge or joint venture to get public. And I think these are – this is the direction it's going ahead if it survives, which I think it will, and it is proven that there are parts and aspects to the SPAC process that make it a great compliment to the IPO markets. But it's got to mature a little bit, and then I think that's what's underway right now.

That's very color, Ken, thanks so much for taking my questions.

Sure.

We can now take the next question from Richard Ramsden of Goldman Sachs.

So good morning guys. So Ken, we've heard from a number of your peers that this is a particularly competitive recruiting environment. So I was hoping that you could share your perspectives on the economics of recruiting advisors today and how that's evolved given the presumably they're more expensive, but they're also more productive. And look – has any of the dynamics in terms of recruiting advisors changed in any way, your thought process around some of your expansion plans? Thanks a lot.

Sure. So let's break this into two parts. I think one part is on the more junior bankers and the second is on the more senior bankers. I would say the market for younger bankers, middle-level bankers is as competitive as I can ever remember it. I mean, this is probably not too different from what we all experienced at the – those of us that were in the business around the time of dot com. Part of it is driven just by the demands of investment bank – of the investment banks, and how well people are doing at the moment. Part of it is that there are just a lot of other opportunities in the economy that are drawing people away from our industry. And part of it is just kind of the reaction to the pandemic being shut in, being cut-off. Some of the attachments to firms are less than they used to be. So this is a – this is a tough environment both in terms of getting talent, retaining talent. My guess is that will translate to some extent into expense over time. On the more senior front, I think it's differentiated between different firms. We've done so far this year, I think it's more than a dozen senior hires. Many of which haven't yet been announced. But we're finding that our platform is actually quite attractive right now and that we're doing it in a way where we think the economics make sense. And we see a lot of opportunity to expand right now, and we're not having that much difficulty attracting talent. Now that could change, but for the moment it's pretty good in that regard. I can't speak to others experience at the senior level, but that's been ours.

Okay. Thanks a lot. And then perhaps just as a follow-up to that, I mean, presumably at this stage, the 59.5% comp accrual, you think reflects the pressure that you're seeing in terms of the cost of talent?

Evan, you want to take that?

Yes. Look, as you know, Richard, they – comp ratio of 59.5% is our best estimate, and we have to look at that every quarter, and we'll see how things develop as the year progresses. But as you know, comp decisions for us, the big part of that really happens in Q4, that's really where we have the best – the best picture of the way the full year is going to turn out. And the full year always depends on revenue growth offset by the pace of investments, as you're saying. So as we're continuing to invest significantly into the farm, we're seeing this as a really great opportunity for us. As Ken was just mentioning, really terrific opportunity to take advantage of the market, the marketplace for Lazard and just to bring on an accelerate number of hires and so, that goes into the figure and we'll see how it turns out.

Okay. Thanks a lot. That's very helpful.

We can now take the next question from Brennan Hawken of UBS.

Good morning. Thanks for taking my questions. First, just on the advisory side given some of those comments about the recruiting environment and whatnot. Where was the advisory MD headcount now or at the end of the quarter? And do you have a pipeline or expectation you've added a decent amount of talent? Are you largely done with the ads for this year, or do you think that there's still more coming?

Evan, you want to take that?

Yes. So we had 180 on MDs in the financial advisory business at the end of the second quarter. Obviously that's up significantly from where we were at year end. I think we're about 171 at that point in time. And as we said at the beginning of the year, we're targeting 10 to 15 net increases this year, obviously through the promotes that we do as obviously a significant portion of our of our growth that has been in the past year as well as especially this year with our significant promote class with MD, as well as the external hires. As Ken mentioned, we've been very successful at bringing people on. So I think we're on track for that, as Ken said, we'll see. We'll see if we can get there through the end of the year, but we've made significant progress. And I think that that's our hope to achieve that and we've made some significant progress already by mid-year and the few people that will come and go through the end of the year. And obviously there's some of the hires that we've been – haven't been announced yet, haven't really joined yet. So they'll come in as well. So we're on track and I think the 10 to 15 number is still is our best estimate for the year.

Got it. Okay. Thank you. And then I believe, Ken, you flagged and lift-out in your commentary and this was a big theme that you had mentioned earlier in prior calls. What's the updated view on the market for lift-outs and bolt-ons and asset management? We hear a lot about the competition for talent in – on the banking side, not as much on the asset management side. So is it as intense there? Or is that maybe a more attractive or fertile field, so to speak to pick-up people and capabilities?

We think it's a remarkably attractive time to be doing what we're doing. There's obviously been a lot of displacement as a result of the changes in asset management over the last decade, last several years in particular than passive pressure on concentration of managers, pressure on fees, correlation to markets and asset classes. And so consequently if you take a look at the landscape of smaller hedge funds, hedge funds with only a few hundred million dollars or less under management asset managers, not only asset managers the same way, there's just hundreds if not thousands of them out there today. And we have, I think a unique platform out there we're, we're neither for a trillion plus asset manager. What we're doing doesn't move the needle. For a smaller asset manager oftentimes they don't have the breadth of distribution, the capabilities around IT compliance that are all increasingly necessary to scale your assets, especially to an institutional base. So what we're seeing and is a great flow of smaller asset managers, smaller hedge funds with capabilities oftentimes spoken long and long and short that are potentially attractive to our platform. And our goal is to kind of add one or so a quarter, build a portfolio of these – of these capabilities. Hopefully we'll be able to scale most of them, some of them but there should be a few that'll do very well. And that's a source of both growth for us in the future. We can pick these up, I think on very reasonable terms. It's a source of growth for us in the future and also it brings capabilities to the firm that otherwise would take an enormous amount of investment. And so it's quite an attractive approach for us right now, and we're seeing a great flow and we expect to continue to see that for some time.

Great. Thanks for that color Ken.

Sure.

The next question from Jeff Harte from Piper Sandler.

Hey, good morning guys. A couple on the asset management side. I guess first of all we continue to see outflows granted that the trend has been better, but at what point in time, do the outflows kind of turn into inflows? And when do you think or do you have a feel for when the emerging market kind of equity outflows may come to a stop?

Look, if I could pinpoint that, if I could tell you that it'd be wonderful. But look a couple of things positive in this regard. One is they are abating. The trend has been a little – has obviously gotten a little bit better. Second is performance in a couple of the challenge funds has really improved over the last couple of months, has had for a lot of value managers, so that this has been a better time for some of the strategies that – some of the strategies or particular strategies that have been under pressure. So hopefully that will abate some of the pressure there. And then obviously it's sort of the law of larger numbers, which at some point it just becomes less of a contributor to what's going on. I mean, throughout this period, our gross inflows have been robust. And we're obviously have a number of strategies which we're – that we've launched and that are doing well. I mean, one of the ones that we alluded to in the transcript was the – or the early remarks was around converts, which has done remarkably well for us over the last several years and has been an area of real growth. And there were a bunch of others that are in the pipeline that we hope to get the same from.

Okay. And sticking with asset management, why don't we kind of look at fields, I guess, two things, one that the calculated management field from the outside at least picked up this quarter after it's been kind of taken down for a while. Is there much to read into that beyond maybe mix and I guess that the second leg of it would be on incentive fees? I mean, those just keep coming in so strongly. Should we be thinking of that is being a more sustainable higher revenue line, as opposed to just good performance in the last few quarters and we are driving surprisingly good upside?

Evan, you want to take that?

Yes. Look on the basis points, fee rates, Jeff, I would say, I hope that majority of it has been for the last couple of years, that the largest movement that you're going to see their quarter-to-quarter always is driven by sort of the business makes, the asset mix, sometimes the vehicle mix that's going on there. So as you start to see some of that move around, you're going to have that change quarter-to-quarter over time. But as you said, as the portfolio shifts you're going to see the changes, it's sort of an output, not an input. And so we've seen a lot of change over the last couple of years in our asset mix, as Ken alluded to some of our higher fee platforms have come down a little bit relative to some of the things we've had significant strengthens, which is quant and fixed incomes, you've seen the growth we've had there. So that's just naturally going to change around the basis points. With regards to incentive fees, I would say, yes, it's our third straight quarter where we've had significant incentive fees. I mean, it's across a broad range of strategy been as I said before; it's driven by a couple of European equity portfolios that were very, very strong this quarter. Pretty idiosyncratic, it's hard to kind of talk through this and sort of give you an indication of how that's going to turn out from quarter-to-quarter. The outlook for us really always depends on the market performance. 20% of our AUM have the potential for incentive fees. And so that all different types of strategies that will come into the mix. Most of them – most of these incentive fees will generally crystallize or potentially get realized in Q2 and Q4 as you know, historically. So I'd expect Q3 to be a little bit lighter, but we'll see where market performance goes up for the rest of the year. And hopefully pick up the trend a little bit in Q4 and hopefully the – I think it speaks to the performance of a lot of our funds and how well they've done over the last couple of years.

Okay. Thanks guys.

We can now take the next question from Jim Mitchell from Seaport Global.

Hey, good morning. Maybe just circling back to the investment spend. You guys obviously have a very broad platform, but you're accelerating, hiring. Can you maybe just kind of discuss where you see the most kind of white space for new hires? You've obviously spent last couple of years on financial sponsors; particularly in the U.S. where else do you see opportunity?

Okay. Let's talk advisory first and then turn a little bit to asset management. On the advisory side, look the focus is going to – the focus has been on areas where we see what I would say is exceptional growth over the next couple of years in either because of the specific industry segment or alternative because of some dynamics around capital flows and such or to plug a hole. An area where there is a particular weakness in our franchise where we need to upgrade, or we see an opportunity to upgrade. So the areas which in some ways are obvious are financial sponsors obviously things around alternative capital. This is just becoming an increasingly important part of the capital flows in the M&A world. And so anything to do with that is going to be an area of interest to us. Obviously the sectors where we're going to see accelerated growth, that's biopharma technology the shift to a carbon free world, how you play that renewables. I mean, these are all areas where we're seeing exceptional growth business services in particular is an area where there's a lot of activity because it covers a wide range. It's very segmented in such. And so having expertise in there is important. Geographically, I think we're pretty balanced there, if we see particular areas where there's a lot of growth, yes. We've added capabilities over the last couple of years in some of the emerging growth fundraising areas where we think there's a lot – still lot of opportunity going forward. Some of the capabilities that complement our core M&A franchise the shareholder advisory business, ESG advisory, I mean, these are all areas that continue to be interesting growth areas for us. Turning to asset management, there are probably three or four areas where we've seen opportunities for investment. One is expanding our ability to penetrate the more professional part of the retail channel. That's something where we're probably underrepresented relative to the strength of our traditional institutional platform. That's somewhere where we're doing hiring, complementing some of our core strategies and traditional strategies in quantum somatics and adding capabilities in ESG as areas that have been important to us those are all areas of strength and we're just building on that. And of course, what I alluded to before about some of the investments in these new platforms who are roll-up of some of these smaller hedge funds and asset managers where there's a lot of opportunity at the moment.

Yes. That's a long list. I appreciate that. Just maybe one follow-up on European restructuring. I think you had talked about how they had been a little bit lagged and the recovery, there might be a little bit of a lag and the restructuring business, but given the capital markets environment seems like that's probably not the case. So just how, how are you thinking about restructuring overall? You see a second wave at some point, everyone has a different opinion, just curious of yours?

Yes. Look in the near-term, as long as the macroeconomic environment stays as robust as it is, and you have credit conditions staying as strong as they are. The restructuring environment is going to be muted, save for a few sectors that are having – that have a difficult time recovering either because of a research in a pandemic in an area that interrupts travel, leisure, entertainment and such. Balance sheets are actually quite complicated. Capital structures are quite complicated. So as we start to see a softening in the micro-environment in the future if we see a softening or you see some kind of interruption in the credit markets or the markets generally then the restructuring activity should pick-up pretty significantly and probably pretty steeply because it just the complexity of capital structures. But for the moment I think, or at least for the foreseeable – next few quarters or so I think the restructuring environments can be pretty muted. It's going to be concentrated in areas where there's a particular threshold of pain, but that's not going to be a general pickup. I mean, the other area to keep an eye on is what happens because of de-carbonization to certain industries. That's something to keep an eye on because I think that's going to proceed a lot quicker than people expect.

Okay, great. Thanks.

This concludes the question-and-answer session. Thank you everyone. This now concludes the Lazard conference call.