Operator: Our next question comes from Jim Mitchell with Seaport Global. Please go ahead.
Jim Mitchell: Hey, good morning. Just maybe on — you noted Peter that Europe was particularly strong this year. Can you talk about your outlook on Europe? How much of that strength was just your push for productivity and collaboration versus the environment? And how you’re thinking about that in 2024?
Peter Orszag: Sure. So look we have new co-heads of Europe on the Advisory side, which is fantastic. That’s — I think, if you go back to our Lazard’s history one of the questions always was the degree to which Europe was integrated. We’re there the co-heads are off to a great start. And we expect more to come from that structure as we move forward through time. With regard to the market, we’re still seeing significant activity in M&A and in restructuring out of Europe. It may well be that part of the reason for that is that, the macroeconomic environment is a bit more challenging in Europe than in the US especially in Germany specifically, but across the continent and to some degree in the UK. And so as companies see that more challenging domestic market, they are looking for top line growth through inorganic options, including in other geographies and that plays to our strength.
I’d highlight again that among the independent firms, we really are the only one that has a strong presence in both North America and Europe. So to the extent that European firms are looking for North American targets that’s a natural fit with Lazard.
Jim Mitchell: Right. Makes sense. And then just maybe on the margin targets. You talked about getting productivity per MD up to $8.5 million by 2025. Is that kind of the bogey you need to get to the 20% margin and comp ratio targets? Or just trying to triangulate what normalized you would mean for those targets?
Peter Orszag: I think there are lots of ways of hitting the normalized targets, but the plan all fits together. And so we are aiming to accomplish all of the things that we’ve set out productivity targets, obviously, make it easier to hit the margin targets. But I wouldn’t say, it’s not a necessary condition. It may be partially sufficient, but it’s not necessary. But we’re planning on doing all of the above. So hitting the expansion in the number of MDs, the increase in productivity which then helps the finance increase in the number of MDs and be very attentive to our comp and non-comp expense ratios as the market normalizes.
Jim Mitchell: Okay. Great. Thanks.
Operator: Our next question comes from James Yaro with Goldman Sachs. Please go ahead.
James Yaro: Good morning, and thanks for taking my questions. I just wanted to touch on the Asset Management business and get your expectations for flows in the fee rate in that business over 2024 and maybe into 2025.
Peter Orszag: I’ll let Evan take that.
Evan Russo: Sure. Hi, James, this is Evan. So look I think flows as we talked about in the previous quarters we expected that flows will becoming more balanced overall for us net flows in 2023 were significantly better than in previous years, despite some of the headwinds that we’ve all seen in the market. We expect it to be choppy continue to be choppy month-to-month quarter-to-quarter as you know based on our business and certainly the first half of this year. A lot of that is driven by the fact that, you still have a lot of money sitting on the sidelines moved into money market short duration type instruments based on higher yields that people are getting. So it’s a lot of money sitting on the sideline that’s drawing capital away from risk assets and putting new money to work.
So there’s a little bit less conviction that we saw. And I think that, the market saw generally in Q4 and into the beginning of this year by putting new money to work. So that starts to come off the sidelines, which we expect to happen over the coming quarters ahead, we expect that to be a positive movement for us. We’re seeing significantly as Peter called out in the script, we’re seeing growing interest in many of our global strategies, the quantitative platform and selectively in fixed income. I’d probably say, it’s a little bit earlier for us in the emerging markets. As part of the cycle, I think investors are still as we said sitting a little bit on the sidelines waiting for that opportune moment, waiting for the right timing to go back and reallocate into EM.
As you know the last probably five or 10 years, people started taking allocations down. So we see that as a potential growth option and we’re definitely having more conversations with clients and allocators about the right timing of that transition back into that space. And that would obviously be a positive for us as well, but I would expect that to be playing out right over the next 12 to 18 months. But overall, I think that’s the strategy that we would see continuing to work in. I think from a performance perspective, we’ve had a significant performance across the portfolios with significant strength in many of those areas that I called out global EM, the quantitative platform. And so as markets broaden out from what we saw in the past years, we all know the return performance beyond just seven stocks I think this moved more towards fundamentally driven markets and certainly will play to our strength and we’re already seeing that in the performance that we’ve had in the emerging markets in many of our international strategies.
James Yaro: Okay. Thanks That was very helpful. Just one other one which is on your buyback. I think the size of buyback was a positive surprise in the quarter in my opinion. Maybe you could just speak to your updated thoughts on capital return priorities from here?
