Mary Ann Betsch: I’ll take that one. So, we, as have been working hard to identify and implement cost savings, and we’re pleased with the results of those efforts. When you’re looking, though, at kind of quarter-to-quarter seasonality, as it tends to move around a bit. And if you’re thinking about the rest of the year, I would kind of assume that the cost savings that we’ve achieved are going to be more or less offset by increases in things like occupancy costs and market data, where we’re kind of price takers, and then travel, which is increasing as client activity picks up, which is a good thing. So, there’s kind of, put some takes there. But the first quarter, we had a little bit of an excess benefit, just based on the comparison to last year, where there were some sort of one-time pops.
Brennan Hawken: Okay. Was that because the comp was high, not necessarily because the base in one? I’m just thinking about the base in one queue, not necessarily the comp.
Mary Ann Betsch: No, sorry. What I meant was that if you’re comparing non-comp year-over-year, the decline is partially reflecting the fact that last year there were some one-time items in there.
Brennan Hawken: Ah, okay, okay, great. Thanks for clarifying that. And then you spoke and you prepared remarks a bit about restructuring and the activity levels that you’re seeing. Could you speak about where restructuring revenue as a proportion of advisory has been running? This is something we all used to get disclosed, but it would just be helpful to think about how much that has contributed to your advisory business in, the past year or so, and particularly helpful given that the outlook remains pretty solid for that business?
Peter Orszag: Yeah. So, Brennan, I think I’m going to give you some color, but may not fully satisfy the desire for perfect clarity on this.
Brennan Hawken: I’m used to that. It’s okay, Peter.
Peter Orszag: Let me give you a little bit of backdrop here. So, first, I think, we say restructuring and liability management. Honestly, or frankly, it’s mostly liability management in today’s marketplace. And we did see a significant uptick relative to this time last year, which we believe will continue. relative to the market, we were lagging a little bit in the beginning of last year. I think we’ve now been catching up or caught up in our rightful place in the marketplace that’s been reestablished. And so, I mean, as an example, the increase for the first quarter relative to the first quarter of last year, this quarter’s restructuring and liability management was over two times what it was in the first quarter of last year.
We do expect that an elevated level of activity will continue as the debt maturities that are approaching interact with the hire for longer environment. And we feel like we are now very well positioned with a more diversified team that’s covering creditors and debtors and that has much more connectivity to private capital where a lot of activity is occurring to continue to be active. Frankly, even as interest rates come down, this will continue to be, because of the maturity walls, it will continue to be a significant area of activity.
Brennan Hawken: Okay, thanks for taking my questions.
Operator: Thank you. We’ll take our next question from James Yaro from Goldman Sachs. Your line is open.
James Yaro: Good morning, and thanks for taking my questions. So, we’ve seen industry M&A activity year-to-date improve substantially more in the U.S. than in Europe. I was hoping, Peter, you might be able to just provide your color on dialogues and the differences between the U.S. and Europe.
Peter Orszag: Sure. Look, we did see, including in the first quarter, there was more of a pickup in North America than in Europe, although both are up. And that’s generally the picture that we see for the year ahead, or for 2024 as a whole, which is a larger or a disproportionate uptick in North America, but still a healthy level of activity and, expanded level of activity in Europe. So, as one of the differentiated benefits, or one of the differentiators for Lazard is that we’ve got strong presence both in North America and in Europe. It provides a source of diversification, if you will, when there are different pockets of opportunity. Last year, Europe was relatively strong for us. It is still a strong year for Europe, but North America, consistent with that market. I think we may be outpacing the market a bit, but consistent with the market, we’re seeing a bit more strength in North America right now.
James Yaro: Okay. I think that makes a lot of sense. Maybe just on the corporate revenue line, which did reach a record this quarter, any chance you could size the gain in that line just so we can, model the sustainability, model sustainably that line item? And then any color on whether you do accrue comp and non-comp expenses against that line item?
Mary Ann Betsch: Yeah. So, in terms of the gain, I would describe it as fairly sizable, but not a majority of the corporate revenue for the quarter. So, if you’re, just thinking about kind of the run rate for the rest of the year, I would assume, some return on our cash, plus or minus, investment gains on seed portfolio. So, that’s how I would think about that. And then in terms of the comp ratio, we really do that for the firm as a whole, and it’s not, at this point in the year, not done on a person-by-person basis or, kind of at that level of granularity.
James Yaro: Okay. That’s very clear. Thanks so much.
Operator: Thank you. We’ll take our next question from Devin Ryan with Citizens JMP. Your line is now open.
Devin Ryan: Thanks. Good morning, Peter, Mary Ann, and Evan. Thanks for taking the question. So, I want to just come back on the comp ratio as a follow-up and appreciate the color you guys provided there. And I also know that you’re projecting revenues on a four-year basis at the beginning of the year is really tough. So, first quarter comp accrual, maybe isn’t a perfect science, but is there a level of revenue or a range of revenues we could think about that would be supportive of kind of driving that comp ratio or the overall margin profile back to the normalized range? Just trying to kind of think about that algorithm and what it looks like given that maybe the first quarter is not the best way to judge it off of.
Mary Ann Betsch: Yeah, I mean, I think, as Brendan mentioned at the top of the call, we are still sort of dealing with the aftermath of the deferrals and the impact that that has on the current year. So, that’s definitely part of the equation. and so, it’s I think a question of how quickly we can get back, into the target range. And the level of revenue certainly matters, but I don’t think I would give you a magic number where, I can foresee that we would hit 59.9%, right? I think there’s a lot of input to it, and so we’re trending towards it, but the pace is just going to depend on many factors, including how quickly the revenues recover.
