Okay. Thanks again. Definitely my distinct honor to introduce Tracy Farr. Tracy is the Chief Financial Officer of Lazard, assumed the role in February of this year, bringing a powerful combination of strategic insight, financial rigor, and deep institutional knowledge to the helm during a transformative period in this storied firm. Tracy is a Lazard veteran back to 2013, previously a producer in the capital structure advisory group, and senior member of its corporate development and strategy team. In addition to being a significant physical presence, Tracy brings intellectual rigor.
All right.
Good to have him here. Yes. You guys, there's a lot to talk about. You announced a few things on the comp front on the last quarter. I'd love to start there. A shift to more cash incentives, which will narrow that delta to peers. When you talk about that, though, when you comp yourself, do you purely focus on the advisory peers? Do you look at the asset managers as well? Then, as we think about that uplift to the comp ratio, what does the glide path look on the back end?
Yeah. Let me answer the peer question, because that's an easy one to answer, and then maybe I give a bit of broader background around the program and what we're trying to do, and then get to your glide path point. You're absolutely right. When we think about the peer set and looking at that deferral rate, we're primarily focused on the Financial Advisory peers, mostly because in our business, that's probably where we're the most off-market, if you want to think about it that way.
Okay.
In our Asset Management side, we already had some internal governance that kind of capped some of the deferral rates on that side of the business, so we have less, I'll say, hotspots on that side, primarily focused on Financial Advisory. That said, if you went back in history, I think part of the issue here, and I'll come to this in a minute, but with the deferral rates and movement over time, while that mostly affected Financial Advisory, it kind of bled across the firm in various places. I think there's a little bit of cleanup everywhere throughout the firm. I think you'll see some improved or lower deferral rates across the firm, but I think it's primarily in the Financial Advisory side and primarily in the higher total comp area, where you're just deferring quite a bit.
Going to the broader reason we're doing this, first, I would say this is part of a kind of a multi-year, multi-phase initiative to try to improve the compensation profile for a number of reasons. Earlier this year, we already changed our vesting periods, where we went to kind of one-third, one-third, one-third across three years for most of our deferral policies. Right now, we're talking about deferrals. We're also looking at retirement issues. This is part of a broader piece. There's three reasons I would highlight that I really think that the change in the deferral is helpful. The first is from a competitive attraction of talent and retention of talent perspective, because naturally, you don't want to be off-market relative to your peers. It doesn't help as far as attracting and retaining talent. That's the first one.
Yep.
Second reason is, I genuinely believe a few years from now, it results in a much better comp ratio from a quality of the financial reporting perspective. The point there being, I'd like to get that comp ratio on an adjusted GAAP basis to have less and less amortization from prior years and more current year comp. I think that just is a better relationship between investors and management on holding management accountable. The third reason, which I think is also really relevant to investors, is I think about deferral rates. If we have the ambition of offsetting share dilution as a result of compensation in our buyback program, if I issue less shares and defer less, I naturally have to buy back less. To me, it's effectively a buyback in a way.
Going to your glide path point, I think that what you'll see if we were to make this change in the deferrals, which we expect to do, with the quantum yet being determined.
Yep.
But for whatever quantum that is, you would see kind of a single-year step-up or spike in the U.S. GAAP metric. Now, I would caution everyone or remind everyone that is an accounting concept. On an awarded GAAP or on a just a total compensation basis, you are not actually paying people more. You are changing the form in which you pay them. And so what that results, though, on a U.S. GAAP basis is a spike in 2026 and then a quick reversion in 2027. And I have mentioned before, I think the goal or the glide path that we have around compensation is we have talked historically around the J-curve dynamic and everything else and the large investment that was done into Financial Advisory. I think you will see the compensation ratio normalize, and I keep using that term, a normalized compensation ratio for all that amortization and for, frankly, Campbell Lutyens.
Those two things create a lot of noise, including the deferral. So it is kind of like J-curve, Campbell Lutyens, deferral. The noise from that on an accounting basis kind of really rolls out by the end of 2028, so that by the end of 2028, we have kind of a normalized and very, very improved comp ratio.
Understood. We jumped right into the accounting geek stuff. Just to frame, when you pay in cash, it is expensed in the year in which it is issued. When you defer, it is an amortization that comes back and takes the vesting schedule to do so. Okay. When we think about the uplift and that glide path, right? We talked about. You and I have talked a little bit about this in the past. Clearly, you are going to see the spike, but the allocation to cash is something that will be durable, right?
That is right.
I get how the amortization will benefit, right? Because when you do that, you're inherently reducing your future amortization expenses, and you could see a few years sort of like path.
Is that the right way to think about it? You made reference to the fact that it'll pop and then come down rather substantially, so I'm guessing there might be some other factors that could be causing that.
Well, that's right. Let me comment on the accounting, and then let's talk about the glide path, and we can attribute the recovery to different things.
Okay.
From an accounting perspective, the reason that you have this one-time jump is you're accelerating more comp because you're paying in cash, so you recognize that this year. In 2026, though, you still have what I'll simply refer to as three years of vintages of amortization, which were all at higher deferral rates. You kind of think of the stack, and it's like, well, I have three years' worth of high deferral amortization.
Yep.
Plus, I've now accelerated my lower deferral—
Right.
of the current year, so you have this spike. Let's go to the next year, so in 2027. Now I have two years of high deferral amortization, but I have 2026 amortization, which is lower—
Yep.
because I already recognized it, so it immediately drops. And then each year, in theory, by 20— This is why I say—
By 2028.
by 2028, you kind of have, not only do you have. Let's talk about that. You have kind of amortization reduction coming from two places.
Okay.
First is the J-curve.
J-curve.
You had this large group of lateral MDs. When we cycled out 80 - 90 MDs between like 2023 - 2025, a large portion of the MDs that were replaced, you couldn't replace all of those with promotes, so you're replacing a lot of them with laterals, which come with larger buyouts and kind of an accelerated comp recognition upfront. That mostly happened in 2024 and 2025, which then, if you think about it, three-year amortization, that's rolling off as well.
Then you have the deferrals, which we're doing this year. That rolls off. So by 2028, you kind of have the amortization effects of the larger J-curve and MD cohort, that rolling off. You have the deferrals also rolling off, and whatever noise from Campbell Lutyens elections kind of rolling off. So when I think about the trajectory on the comp ratio, there's a big portion of that that's also part of the revenue J-curve. It's really like revenue operating leverage.
When you think about the recovery from 2026 - 2028, I would attribute about half of that to revenue growth and about half of that to these structural changes or accounting changes, which are a little bit more reliable to predict, right?
Yep.
About half of that, you have to believe in the revenue path. About half of that, you have to kind of just understand accounting and—
Yeah, it is just mechanics.
believe in it. Yeah, it is just mechanics.
Right. Okay.
I would make one other point, which you made, which I appreciate. The other objective I had with the compensation program is, historically, those deferral rates kind of bounced around a little bit.
Yes.
You have commented on this in the past. My ambition is to make these changes and then leave them alone. I am a bit of an accounting purist where I really like clean, very easy to understand accounting.
I think it hasn't helped people when deferral rates jump around. Regardless of why you are doing that, I think it makes it hard for investors to understand what's going on. My ambition is to get us to what we think is a market, reliable, kind of competitive level, and then freeze it.
Okay.
Yeah.
We won't have to talk about this if you—
Hopefully.
That's right. You also, one of the things that you mentioned, and this I know has been on your mind since you've assumed the role, is operational efficiency and really going after that. You have a review underway of the corporate support functions. You're going to centralize and automate functions. What brought this idea up in your mind that there was a gap in your efficiency, and how do we think about benchmarking against the peer set, and how is the team able to get after this issue and avoid obstacles that might have constrained some of the prior leadership teams?
Okay. Yeah, that's a tough question, but it is a relevant one. This was part of my day one objective. When Peter and the board discussed me taking on this role, I knew this was one of the areas that I wanted to focus on. It was one of the areas they wanted me to focus on. The concern that I had was, as you noted in my intro, I've been at Lazard a long time—
Yeah.
I've historically advised management on these issues, and I kind of know how prior managements thought about this. There was a lot of benchmarking that was already done before I was there, so benchmarking versus peers on headcount, on price per head, on those kind of things. A few years ago, you'll know we did a, I think, a cost savings initiative or something like that—
Yeah.
where they kind of went through and said, "All right, in each of our support functions, we're going to target 5% or 10% savings." Full transparency, I'm not really a believer in those programs, or at least at most organizations, I don't believe they work, simply because it's too much of a year budgeting exercise that immediately and elastically—
It's unreliable.
expands.
Yeah.
It just expands the next year. It just bounces right back. That's very relevant to Lazard for a few reasons, because most of our problem is structural. When I took on the role and kind of was meeting all the new teams and meeting the global function that I oversaw, one of the things became very, very clear. We had exceptional talent in the back office in our support functions. Tremendously talented people with a ton of experience. I mean, a lot of the people in our support functions have been at Lazard for 20 and 30 years. They know the place in and out, and the quality is unmatched. The problem was not effectiveness, it was efficiency. We didn't have any problems with the quality, it was the structure. You had these really talented people, but sitting in a structure that was really difficult to manage.
When I approached this, I went to Peter and the board, and I kind of said, "I really think rather than some sprint to 5% or 10% savings, give me a little bit of autonomy to go and reconsider the entire way that our back office and our support functions are designed." That means it's a little slower to do it.
But my belief was if you structurally change things, you avoid that elastic rebound, because it just can't. You've now structurally prohibited that kind of resurgence in cost. Yes, we have launched a firm-wide initiative that included an evaluation across the entire firm. Pretty much everything that is not revenue-generating was within scope. We're pretty much kind of at the, well, I'll say the middle of that process as far as now negotiating with third-party vendors, getting pretty far along in what the structural new redesign is and what things are moving. For full context for everyone else, when you think about Lazard has this tremendous legacy of these three houses of Lazard in Paris, New York, and London.
And that came with this amazing strategic benefit of being strong locally, but it also came with this baggage of having a back office in each region and a lot of duplicated function. That's what this project is really about. I think at this point, we're so far down the path that it's pretty clear the opportunity that I originally expected would be there is there.
Yeah.
And the hope is that when we do this, not only do we achieve a lot of savings from a margin perspective, but we actually enhance the capabilities of the firm to provide more dynamic and more modern technology-enabled back office services. As to why it hadn't been done, because I've made this comment, a lot of the things we're using are not necessarily new technology. It's kind of old school. But I think part of it came from that culture of three houses of Lazard. It's really complicated. You have a lot of strong personalities, and there's a lot of strong heritage. I think I would have to credit Peter and the board of why it's working right now. When I came in, I told them I thought this would only work if I had kind of universal autonomy.
Even though a lot of those places don't report to me, on this project, I kind of had this authoritarian ability to kind of pull the firm together and remind people that we're stronger when we go together as a firm.
Yep.
That took a while. In full transparency, I think it was a cultural shift for the way that we thought about that part of the business.
Right.
But I would have to credit Peter and the board for somewhat backing me up on what has been a challenging exercise internally to figure that out. I think that's probably why it wasn't addressed in the past, you're kind of in the trenches and dealing with some pretty difficult decisions.
Yeah. Realistically, it's happening, right? So why it didn't happen in the past is a little bit of a who cares.
I agree.
Okay. I know you have been very intentional in how you speak about this, and you have avoided sizing, which I think is wise. But when do you think we should expect an update there?
Yeah. Part of the reason I've tactfully avoided that is I'm in the middle of negotiations with some of those partners, so I need to be careful of maintaining my leverage in that situation. But I think whether it's my suspicion is either in our year-end discussion or in the first quarter, we'll be able to give a lot more guidance around that.
Okay.
I really want to get through kind of what we call solutioning, design, and contracting on a couple of these issues. But I would expect that no later than the first quarter—
Okay.
discussion, we would be giving a lot more detail. The other reason I've been cautious, and I want to keep reinforcing this framework around sizing, is there's two things that I'm going after from a margin perspective when you think about this project internally. There's kind of this year-over-year cost cash savings. In other words, if I just said, "What did it cost me to provide those services last year? What did it cost me this year?" I want to achieve a year-over-year cash savings, right? Everyone should want that. But the bigger reason, going back to my structural point, I'm not just ripping people out or doing a headcount reduction or anything. I'm literally changing the workflow, the who's doing it, the where we're doing it, the how we're doing it. Everything's changing.
The bigger reason to do this will not be necessarily the number that I give on year-over-year savings. I think it will be material, and it will be welcome news to investors of what that year-over-year cash savings is. The bigger issue for me was going back to Lazard 2030. When Peter and I talked about Lazard 2030, it was always about revenue growth.
Yep.
It was always about, how do we supercharge this brand and grow it and double revenue by 2030? What I was really concerned about is structurally, our cost base was not designed to provide the operating leverage should you double in revenue, right? Which meant that what was going to happen is, as we were seeing this tremendous revenue growth, you were going to see this cost base inflate.
Yep.
I was hyper-focused. It is why it was my day one initiative, was we have got to fix that because the growth is coming. I can't let this thing grow underneath it. Going back to it, I think the year-over-year cash savings will be interesting. The bigger one will be two or three years from then when we see what the inflation rate is in my support services. If I can reduce that by a few or several hundred basis points—
Yeah
that delivers way more power in the margin enhancement for Lazard 2030 than the year-over-year cash savings, which will be awesome and really helpful. But I think it is more about the inflation rate of those support services over time.
Yep. There might be something just for European firms, because my prior firm had similar sort of problems with that. Yeah.
It is challenging. Yeah.
Okay. Thanks for all that. That helps a lot. That is very topical. Given we are now halfway through the quarter.
I would love to hear how the quarter is going. We can always track the revenue via public data, and that is certainly building, but there is plenty that is still due to close. The fourth quarter is always a really important quarter for Lazard. Do you have any expectations around what kind of a strength we could be seeing here this quarter?
I think Q4, the way we view it, I think it's going to be a very, very solid quarter. I'd go back to kind of the commentary we gave in Q2 and Q3. We made that commentary around the second half being stronger and that relationship being stronger. That is still true. I think there's a little bit more, and I think the market kind of viewed this of, oh, maybe that comment is a little more Q4 weighted than it was Q3 weighted, and I think that's fair. That's a fair observation. But I think we're seeing, as you're seeing in the public data, this robust build in the pipeline, not only for 2027, but you're right, to Q4 this year. I think I'd always remind people that it's certainly not a quarterly business, certainly not a monthly business.
That said, Peter and I every morning get an update on the pipeline and the backlog. That is building at a very impressive pace, which we expected. I think Peter and I are much more excited around what Q4 means as evidence of the J-curve dynamic and what that means for 2027 and 2028. That is the biggest piece of evidence that it is working and that we are finally hitting that inflection point of delivering that earnings growth. I think Q4 will be an important milestone in that journey.
Okay. Another wrinkle is you will have Campbell Lutyens.
Oh, correct. Yeah.
How does that play in?
We closed at the beginning of November, so from a GAAP basis, you will have about two months of revenue coming in from Campbell Lutyens, which will be helpful because, as you know, that is somewhat a seasonal business, no different than ours. I will say our Lazard piece, legacy PCA business, was much more weighted to Q4. I think Campbell Lutyens is a little bit more spread between Q3 and Q4, simply because they were not a calendar year-end business. They were more of an April year-end business, so you get a little bit of banker behavior in there that shifts things a little bit. These are really strong periods for them, so I think it will be a strong add-in for the Q4 for Lazard.
Lazard CL as a combined unit, which I am sure we will talk about, I mean, we are just seeing tremendous growth in that business, and they have continued to kind of outperform the case that we underwrote the deal on. I agree, that will be a helpful catalyst in Q4 as well.
It does not always show. Actually, it pretty much never shows up in the public data, so you just have to sort of be aware of that.
Yeah.
Yeah. Okay, you know what? Why don't we go out of order and jump straight into Lazard CL?
Mm-hmm. Sure.
Because I think that's relevant here. So, transformative deal, expected to generate $500 million of combined revenue in 2027, and lifting your private capital-related revenue to half.
And non-M&A to 45% of advisory. So, it's moving you towards those 2030 goals—
Yeah.
in a big way, in one case, getting you there. Thinking about the combined Lazard CL revenue mix, how does it break down between primary and secondary?
Where are your growth expectations for that business?
On a combined basis, because keep in mind, we had a very, very strong private capital advisory business, so did they. On a combined basis, primary revenue volume is probably about half, almost exactly half of that. Slightly less than half would be kind of your secondary deal volume. Then there is a little bit of kind of what we call other advisory revenues mixed in there, very, very small. So, think of it about half and half.
Okay.
Which, by the way, was part of the strategic rationale of the transaction, because both of our businesses were weighted somewhat differently between that.
Yep.
Getting a more balanced portfolio, not only geographically, but by industry, by product, and frankly, even by client. They brought so much LP connectivity and all that we have talked about. It really delivers a much more balanced business. You can think about it as half and half. I think the growth is in a number of areas. We can talk separately about the M&A environment and financial sponsors, and we think that will continue to be a catalyst for these businesses. They have a ton of baked-in growth, in my view, where we do not really have to do too much that is new. We just have to continue to capture the volume that is out there. There are a few really interesting opportunities, though.
As I mentioned, Campbell Lutyens, one of the reasons that they were excited to transact with us was the strength of our advisory platform, which they did not have. They previously, at times where they needed that capability, had to co-advise with another bank or advisor.
Yep.
We now have the ability to deliver that advice as a unified platform. That is really exciting, and we are already seeing some green shoots there. Yeah, I would say partly just the revenue opportunities or the existing macro environment that is driving a lot of deal volume there and a lot of fundraising activity and a lot of secondary activity. I would say the enhanced just market position, maybe even pricing power, all of that, as we are just a larger force in that industry. Then I would say there is still some just synergies between the businesses as they contemplate how they interact with Financial Advisory, how Financial Advisory can refer business into that platform. That is kind of a new exciting development.
Yep. Got it. When you underwrote the deal you underwrote it to no synergies.
Yeah.
How should we think about that last point, and what kind of upside you could be seeing?
Well, yeah. When we said it was going to be accretive or modestly accretive in 2027—
Yep.
that was on no synergies, and we stand by that. Not only was that, but it is outperforming its original business case, and we have now identified already probably what I will call two different areas of synergies. One is the revenue synergies I just mentioned. That comes from referrals, it comes from the enhanced market position, and it comes from this kind of co-advising dynamic where they no longer need to co-advise and we can go together. That is actually a material amount of revenue, which was not part of our underwriting case when we did the transaction. The other was cost synergies, right? We know that there are going to be a fair bit of cost synergies here. We just weren't focused on that as far as justifying the acquisition, right? Already, I will give you an example of not only do we know they are there, some we have already achieved.
Real estate, for example, we wanted to get our private capital advisory platform, both Campbell Lutyens and our legacy Lazard PCA business, Lazard CL as a combined unit, as close to our Financial Advisory peers to capture on some of that Financial Advisory referral synergy. In the process of moving people around, we already were able to rationalize some of the real estate footprint, which delivered some immediate kind of savings in the near term. There are examples of that, the back office, that program that I talked to you about. We have the larger. It is really easy to roll their back office into that. That delivers another amount of synergies. I think there is some healthy area for improvement off of the base case that we underwrote a bit.
Okay. Got it. You guys, one of the big points around the 2030, which you sort of referenced a couple times around revenue.
That being the big thing is the $10 million + MD productivity.
Yeah.
Right? Under the plan, the goal is to double firm-wide revenue. This progress has really been quite solid. In Advisory, revenue per MD did exceed, or it is targeted to exceed $10 million in 2028. How are you feeling about that target, and how should we be thinking about the J-curve in ramping the MD impacting the trajectory?
Right. When we looked at Lazard 2030, naturally one of the things we wanted to do was not only achieve the revenue target, but be more efficient in doing that. The way you do that is really focus on MD productivity and then focus on the support structure around each MD. MD productivity is at the heart of it. We reported average MD productivity of about $8.9 million in 2025. I think to your point, the J-curve means that we don't have a linear path to that $10 million, but we have a lot of confidence in that $10 million in 2028. I think from an accounting perspective, because of the J-curve and the hiring that's happening, which is your J-curve comment, you'll probably see a modest dip in that in 2026 just because the sheer number of MDs and the number that are ramping.
But given what we're—
Nominally.
Yeah, just nominally. Yeah. Given what we are seeing in that same backlog and pipeline data, gives us a lot of confidence that you'll see an improvement in 2027 relative to 2025 on your MD productivity and on your path to that $10 million, which we feel pretty confident about. I think the other interesting bit that gives us a lot of confidence around that number, we track that MD productivity by MD and by cohort. So, what we also try to do is keep track of our track record, if you want to think about it, of are we hiring the right people? So, an interesting stat which we gave, I think, in either the Q2 or Q3 commentary was, if you looked at the average productivity of the MDs that we parted ways with between 2023 and 2025 and looked at their productivity, which we viewed as being sub-average for what we wanted to achieve in Lazard 2030, so we parted ways with them.
If you look at the MDs that we've hired since then by cohort, for the MDs that are now maybe an average of two years on platform, those people are already more productive than the MDs that left, and they're still ramping. If we use a lot of our historical experience to project that forward—
Yep.
it gives us a lot of confidence around that $10 million number in 2028.
Okay. Can we drill into that a little bit, right? You probably have looked, I use the term vintage, maybe it's the wrong way to think about it. I mean, if you think about the several years that you guys made a lot of changes, was there any trend in the differences between those vintages? Like, did you get better as you grew?
Yeah, that's an interesting. There was a trend that way of you actually saw the ramping period improving by year, which was interesting. I think that was, Peter actually mentioned this, I think, last night at our dinner.
Yep.
We've not only gotten a different group of MDs. I think we're getting better at the recruiting process—
Yep.
of vetting people. I think you see that in the data a little bit. The other dynamic, which it's hard to see unless you have the whole data, but if you look in the earlier years of that rebuilding, there was a little bit more investment in what I'll call product bankers in our capital solutions, financial sponsors, geopolitical advisory, a couple areas. Then in the second half of the big hiring, it's been much more industry M&A bankers. And those bankers have different productivity levels, but you have to divorce that from what are they delivering throughout the firm, and there's a little bit of that dynamic as well. We've been very, very focused also, if you think about it geographically, there's been more hiring in North America.
Peter's talked about the amazing amount of growth between what we have today versus in 2027 or 2028.
Yep.
The amount of ramped MDs we'll have in North America is dramatically scaling, and that tends to be one of your higher productivity areas. That's kind of where we've been deploying a lot of the effort.
Okay. I'd be remiss not to mention you put out your AUM this morning.
Oh, right. Yeah.
Yes. Would love to touch briefly at least on that. Inflows in the month.
You guys have continued to state your goal of being net flow positive on the year, but you kind of got a leaping start in the beginning of the year. Is the expectation that on a go forward or maybe semi-annual, you'll be able to keep up this positive net flow dynamic, and what has the outlook?
Yeah, that's right. I would go back to, obviously at this point in the year and with the print this morning of $1.7 billion net inflows, right? You only have two months left. We have a lot of confidence that we're going to, on a healthy margin, be where we stated of positive net flows. I would caution, and we know this about the business, and you've seen that even over the past few months, one month you have some outflows.
Sure.
Another month you have some healthy inflows. That's going to continue. I think even in the last two months, you'll see a little bit of back and forth. That's very, very normal. What excites myself, Chris Hogbin, Peter, Chris Hogbin's whole team is where you're seeing those inflows and where you're seeing our investments in distribution factor into where those inflows are going. We've seen a little bit more fee stability in that business than what I would have modeled years ago and what I think you and I have discussed. Part of that is where those fees are going, some of the new products which are coming out.
We've seen really, even though it's small relative to the rest of the business, we have more than $3 billion in assets on the ETF platform, $2 billion of that in one particular product offering, which was scaled very, very quickly in the process of a lot of these fixed income ETF expansion. There's some exciting product development that's going on, and so we also keep track of not just net flows, but where the flows are going.
That also is very, very encouraging. But I think what we have felt very confident about was that Asset Management had this tremendous inflection given the management team that was brought in, the areas that we focused, which historically we've highlighted Chris Hogbin, Rosalie, Eric, that management team, but now we also have new head of product development, new risk people. We have a new head of corporate development in that business. So there is an energy shift, what I would say, in Asset Management, which is exciting to observe for somebody like me who's been in the business for a while—
Yeah.
to see the energy coming out of that business and see it manifesting in positive net flows for the year probably, for the first time in a long time, I think is very exciting.
Right.
Yeah.
One of the things that also has generated some excitement, at least with investors, is Peter's tone around considering strategic alternatives.
In the past, other management teams have been more dogmatic about avoiding that, whereas Peter has made it really clear, he did it again last night at dinner, that there's nothing sacred around any of that. What's the right way to think about that? Given you guys have this Lazard 2030 ambition, how have the incentives been placed so that it doesn't disincentivize something if it works out to be in the best interest of shareholders?
Yeah. Well, that is a really good question. I would say there are no incentives baked into the management team or 2030 objectives that would deviate from what you heard from Peter. Peter, myself, the rest of the management team, we are what Peter mentioned, very, very focused on what makes sense for the firm, for the investors, for the ultimate value of the business. Peter mentioned on the last quarterly call, and you are using his words, and I would echo them, which there is not a dogmatic obsession around a particular structure. Peter also mentioned last night, which I would credit him for, I think it is part of his management style, is that he is very willing to be ambitious and go after something.
When the data starts telling him something different, he is very okay to shift and move in a different direction. For example, within the Asset Management business—
Yep.
there was a lot of speculation that we were going to get pretty heavy into alternatives when we mentioned inorganic expansion. I think he was very disciplined around not doing certain things
that I think there was a fair bit of pressure to do, which I think in hindsight we now know. Myself and Peter shifted very closely to inorganic on the FA side with Campbell Lutyens, and I think that surprised some people.
Yep.
I think that is an evidence of the tone and approach that management is taking around this. I agree there is not a dogmatic obsession of what is part of the business and also what cannot be part of the business, right? From the Campbell Lutyens perspective, for example. Yes, I think that we are just focused on the numbers, the math, what makes sense, but incredibly encouraged. It is a lot easier to talk about strategic options and strategic reviews when your businesses are performing.
Right. Yeah. That is a great note to end on, Tracy. Thanks a lot for your time.
Oh, I appreciate it. Thank you very much.