Good morning, and welcome to Lazard's fourth quarter and full year 2025 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. Instructions will be provided at that time. If anyone should require assistance during the call, please press the star key followed by zero on your telephone keypad. At this time, I will turn the call over to Alexandra Deignan, Lazard's Head of Investor Relations and Treasury. Please go ahead. Thank you, Nikki. Good morning, and welcome to Lazard's earnings call for the fourth quarter and full year 2025. I'm Alexandra Deignan, Head of Investor Relations and Treasury. In addition to today's audio comments, we have posted our earnings release 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, achievements, or other events 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 them. Please also note that unless we state otherwise, all financial measures we discuss today are non-GAAP adjusted financial measures. We believe these non-GAAP financial measures 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 Peter Orszag, Lazard's Chief Executive Officer and Chairman, and Mary Ann Betsch, Lazard's Chief Financial Officer. After our prepared remarks, Chris Hogbin, Chief Executive Officer of Asset Management, and Tracy Farr, our incoming CFO, will join as we open the call for questions. I'll now turn the call over to Peter. Thank you, Ally, and thank you to everyone for joining us this morning. Our fourth quarter and full year results demonstrate our ongoing focus on executing our Lazard 2030 long-term growth strategy. For 2025, we reported firm-wide revenue of $3 billion, with record revenue in financial advisory and assets under management up 12% in asset management. Before we turn to our outlook and financial results, I would like to take a moment to thank Mary Ann and welcome Tracy as our new CFO. Mary Ann has played a significant role in elevating our finance team and building a foundation to support our long-term goals. I'd like to share my appreciation for her contributions and for her ongoing support as a senior advisor to Tracy through this transition. Tracy brings strategic insight, financial rigor, and deep familiarity with our business. He has worked closely with me and others on our corporate strategy while building and executing our vision for the firm's future. As CFO, he will lead efforts to improve operational efficiency, helping drive profitable, profitable growth and progress towards Lazard 2030, while playing a central role in engaging with the investment community. You can read more about Tracy in the press release we issued this morning alongside our earnings release. Now, turning to our outlook and financial results. As we look ahead, we see substantial growth in both of our businesses. In financial advisory, the M&A cycle continues to deepen, while client demand remains strong for our other advisory solutions, such as private capital advisory and restructuring and liability management. In asset management, the repositioning of our business is well underway and is being reinforced by investors looking to diversify their holdings across regions and strategies. Our current level of won but not yet funded mandates is $13 billion, even higher than a year ago, and that is one of the factors leading us to expect positive net flows for the year. In both businesses, we expect our investments in exceptional talent to pay off increasingly as we execute against our long-term plans. Looking back on 2025, in Financial Advisory, we reported record revenue of $1.8 billion. This included record revenue for EMEA and for our Private Capital Advisory group, and a strong year in restructuring and liability management, highlighting the breadth of our global brand and the ongoing diversification of our advisory business. We continue to invest in talent with a goal of, on net, 10-15 Financial Advisory Managing Director additions each year, as measured from Q1 to Q1. We met our goal for 2024 with 11 net adds. As exceptional bankers are increasingly drawn to our platform, we will exceed our goal for 2025, with more than double 2024's net additions. We continue to anticipate hiring within or above our stated range going forward, and we will prioritize acquiring top talent to deliver long-term profitable growth over time. Notwithstanding the pace of our talent expansion, which puts temporary downward pressure on productivity as these bankers acclimate to being managing directors on Lazard's platform, we outperformed our MD productivity goal in 2025, delivering average revenue per MD of $8.9 million. This is an increase of $2.5 million per MD since 2023, and we expect continued significant improvement in this important metric in the years ahead, which I will discuss later. Overall, although timing within the year can always be subject to fluctuations, we expect financial advisory activity to accelerate in 2026. Turning now to asset management. As we have signaled throughout the past year, 2025 was a clear inflection point for the business. Revenue was $1.2 billion, and AUM was up 12% year-over-year. We achieved record gross inflows that exceeded our target of $50 billion through increased focus and accountability in sales and distribution, along with enhancements in our research and investment platform. While at an early stage, our global ETF platform helped to support strong gross inflows in 2025. We have successfully launched seven active ETFs in the U.S. this past year and have already surpassed $800 million in AUM. This growth demonstrates the opportunity to meet client demand for compelling strategies from our specialized investment teams. We've continued to build more client interest and win new mandates across our Asset Management business. As I mentioned earlier, even with the record gross inflows in 2025, won but not yet funded mandates are above last year's already elevated level, underscoring this increasing demand for our active strategies and the successful collaboration across our teams. Under our new executive leadership with Chris Hogbin, we are well positioned to deliver net positive flows in 2026. In summary, firm-wide performance in 2025 tracked our Lazard 2030 objectives and was underpinned by our commercial and collegial culture and our commitment to delivering with excellence for our clients. I'll share more about our progress and outlook shortly, but let me first turn the call over to Mary Ann to provide more detail on our earnings and financial performance. Thank you, Peter. Firm-wide revenue was $892 million for the fourth quarter, up 10% from the prior year, and $3 billion for the year, up 5% from 2024. Financial advisory revenue was $542 million for the fourth quarter, up 7% from one year ago. Financial advisory revenue was diversified across teams and geographies, with Lazard participating in several marquee transactions in the fourth quarter and into January. Completed transactions include Kellanova's $35.9 billion acquisition by Mars, Constellation Energy's $26.6 billion acquisition of Calpine, and 3Cloud's acquisition by Cognizant. Recently announced transactions include AkzoNobel's $25 billion combination with Axalta, Investindustrial's $2.9 billion acquisition of TreeHouse Foods, and Atlas Holdings' $1 billion acquisition of ODP Corporation. In addition, liability management and restructuring assignments include debtor roles with First Brands Group, Pine Gate Renewables, and Superior Industries, and creditor roles involving Modivcare, Saks Global, and SI Group. We also engaged in several private equity assignments, including advising CVC Capital Partners on multiple engagements, advising Odyssey Investment Partners on a continuation fund, and advising on the closing of Eir Partners Fund III. Capital structure and debt-raising assignments include Lighthouse, NextWind, and Ørsted. Turning to asset management, revenue was $339 million for the fourth quarter, up 18% compared to one year ago and up 15% on a sequential basis. Our revenues reflected management fees of $301 million for the fourth quarter, up 17% from the prior year quarter, and $1.1 billion in 2025, up 5% compared to the prior year. Incentive fees were higher year over year in both the fourth quarter and for the full year, totaling $37 million and $59 million, respectively. Average AUM for the fourth quarter was $261 billion, 12% higher than in 2024. As of December 31st, we reported AUM of $254 billion, also 12% higher than December 2024, and 4% lower than September 2025. During the quarter, we had market appreciation of $10 billion, foreign exchange depreciation of $800 million, and net outflows of $19.7 billion, largely driven by the closure of one US sub-advised relationship. Excluding this relationship, net inflows were $8.4 billion for the full year 2025. We see ongoing client engagement and demand across our investment platform, particularly with our quantitative, emerging markets, and Japanese equity strategies. Examples from this past quarter include over $1 billion from a Korean client into Global Equity Advantage, over $1 billion across our emerging markets equity funds from various clients, nearly $700 million from a UK institutional client for Japanese strategic equity, $350 million into Emerging Markets Equity Advantage from an Australian client, and over $250 million from a US insurance company into International Equity Advantage. In addition, we have received over $600 million from a US client for US Equity Select in the fourth quarter. Now turning to expenses. Our compensation expense was $585 million for the fourth quarter and $2 billion for the full year 2025. Investments in talent to support our long-term growth strategy have accelerated, while at the same time, our compensation ratio is trending in the right direction. For the full year 2025, our compensation ratio was 65.5%, compared to 65.9% for the prior year. Our non-compensation expense was $159 million for the fourth quarter and $613 million for the full year 2025. This resulted in a full-year non-compensation ratio of about 20%.... We continue to take a disciplined approach to expenses as business activity and opportunities increase. Shifting to taxes, our adjusted effective tax rate for the fourth quarter was 29.5%, and for the full year 2025 was 22.7%. Turning to capital allocation, in the fourth quarter of 2025, we returned $98 million to shareholders, including a quarterly dividend of $47 million and $50 million in share repurchases. For the full year 2025, we returned $393 million to shareholders, including $187 million in dividends, $91 million in share repurchases, and $115 million in satisfaction of employee tax obligations. Additionally, yesterday, we declared a quarterly dividend of $0.50 per share. Now I'll turn the call back to Peter. Thank you, Mary Ann. 2025 marked the second full year since I became CEO in late 2023, and I've been encouraged by our progress in transforming our culture and our business since then. Even while undertaking this transformation and making the investments that set the firm up for sustained growth in the coming years, we have delivered solid revenue and shareholder returns. In Financial Advisory, we have been actively reshaping our Managing Director group to strengthen our commercial and collegial culture and to upgrade our connectivity with clients. These investments in top talent and our culture will yield increasing benefits over time in both revenue and productivity. As noted earlier, we have raised productivity by $2.5 million per managing director since 2023, and that is despite expanding the number of MDs above our target range in 2025, which means that the share of managing directors new to our platform has remained elevated. As that share normalizes to roughly 30% over time under our expansion plans, the result will be an estimated further increase of approximately $1 million in revenue per MD above the $8.9 million achieved in 2025 from this effect alone. Looking ahead, we see further productivity uplift for several other reasons as well. Increasing traction with clients, our ongoing focus on mandate selection, a disciplined approach to fee structures, and the benefits of integrating AI across our practice. In December, we therefore expanded our goal to include achieving $12.5 million per managing director in 2030 as part of our focus on continuing to meet or exceed our productivity objectives. As part of upgrading our financial advisory business, we have enhanced the solutions we provide to our clients by strengthening connectivity with private capital. Advisory revenue associated with private capital has increased from roughly 25% in 2019 to approximately 40% today, and we are confident we can move toward 50% over time, even while also expanding our revenue from large cap public companies. We see significant opportunity to further enhance our advisory business in North America. Last month, we announced Ray McGuire and Tim Donahue as Co-Heads of Financial Advisory in North America, with Mark McMaster leading a newly formed Senior Banker function dedicated to increasing our large cap public company coverage, which is a top priority for 2026. We are continuing to raise expectations for our bankers to deepen client relationships and increase our market share. Alongside our focus on North America, we will continue to invest in Europe and the Middle East, regions where our brand is strong and where we see significant additional long-term opportunities. In 2025, we opened new offices in Denmark and the United Arab Emirates, and we are actively exploring other countries for further expansion. Looking ahead, we expect M&A to accelerate in 2026, despite ongoing policy and geopolitical uncertainty, as companies look to achieve both scale and focus. Unlike past cycles, we anticipate that M&A will increase alongside elevated restructuring and liability management activity as the result of an ongoing dispersion in corporate performance. We also anticipate an increase in private equity activity as sponsors look to return capital to their LPs, along with continued strength in fundraising. Together, these dynamics position financial advisory with multiple levers to expand revenue in 2026. Turning to asset management, we have established a cohesive and focused executive leadership team, with Chris Hogbin joining as CEO in December, and the appointment of Rosalie Berman as COO and Eric Van Nostrand as CIO, as part of Chris's broader management team. Their strategic alignment across investment, distribution, and operational priorities further supports long-term success. Chris's leadership also allows me to refocus my time on CEO engagement, new client development, and firm-wide strategy. As we have discussed throughout the past year, we have been transforming our asset management business by sharpening our focus on areas of the market where we can add the most value to clients. Active management plays a particularly valuable role where information is imperfect and technology can be applied to generate excess returns, including quantitatively driven strategies, emerging markets, and customized solutions. These strategies and solutions are also where client demand is strongest. They account for a disproportionate share of our high level of unfunded mandates, and they are disproportionately where Lazard delivered significant outperformance in 2025. Looking Looking ahead, we expect to deliver positive net flows in 2026. This is supported by a more diversified platform, best-in-class research and investment processes, and an enhanced global distribution strategy. Furthermore, we believe 2026 will be a year in which investors continue to reallocate toward international markets, which is where our presence and performance are particularly strong. We entered 2026 with momentum, and we believe the ongoing transformation of our asset management business positions us to deepen client engagement and capture additional opportunities ahead. Along with the significant transformations of our businesses, we see two additional factors underpinning our growth over time: AI and Contextual Alpha. We remain committed to being the leader among independent financial firms in the adoption of AI to unlock the collective intelligence of our firm and enhance outcomes for clients and shareholders. We have the scale to invest and experiment, while at the same time, an entrepreneurial culture and size that allows us to be nimble. We saw AI adoption accelerate in 2025 as we onboarded new tools and delivered customized AI solutions to our teams. At Lazard, we are defined by our ability to deliver independent, differentiated advice and investment solutions grounded in what I have taken to calling contextual alpha. In today's world, just looking at a narrow set of financial information, the alpha part of contextual alpha, to make investment or business decisions, is not sufficient. Contextual alpha incorporates the judgment and insight across macroeconomic, geopolitical, regulatory, and other factors that help leaders see beyond what the world sees today. This notion of contextual alpha has always been part of Lazard's DNA. It is more important than ever in a world in which business and government are increasingly interdependent, to help clients navigate complexity, evaluate strategic options, and advance long-term objectives with clarity and confidence. In summary, we continue to execute our long-term strategy, and we have performed even while undertaking a substantial amount of investments and cultural transformation for the future. While we have more work to do, results so far validate our strategy and reinforce our conviction in substantial growth opportunities ahead. Now we'll open the call for questions. Thank you. If you have a question at this time, please press star one on your telephone keypad. If your question has been answered, you may remove yourself from the queue by pressing star two. So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. We'll take our first question from Brennan Hawken with BMO Capital Markets. Please go ahead. Your line is open. Good morning. Thanks for taking the question. Peter, nice to see, hinted at the 12.5 productivity improvement, you know, on the last call, but good to see you guys made it official. I'd love to talk about advisory trends. Clearly, things are looking good. You spoke to some... I'd love to drill into the non-M&A, because M&A, we can all see the excitement. You spoke to a good outlook on restructuring. Could you maybe speak to the revenue mix as it stands today, among the non-M&A businesses, and then what your outlook is for those businesses, you know, in the coming year, and how we should be thinking about forecasting that? Thanks. Sure. So for the year, we, the revenue mix was just a touch under 60% M&A and the residual non-M&A. We, so let's just call it 60/40, roughly, but it's, it's a touch under that on the M&A side and a touch over that on the non-M&A side. We do believe that, in addition to raising the share of advisory revenue from private capital to 50% over time, the non-M&A component of the business can also rise from that, roughly, maybe just a little north of 40%, to something like 50% over time. And that is backed by continued expansions in our fundraising business, in particular, where we had a record year, as I mentioned. Disproportionately, activity in secondaries, as you can imagine, in that part of the business, but a lot of activity and additional talent and momentum there. Restructuring and liability management also had a very strong year. Obviously, we're on a variety of very high-profile assignments in that part of the business, and we continue to see additional opportunities there. I want to again highlight, I know I said it in the script, but that one of the, I think, underappreciated phenomenon over the past decade or so is that the spread in return on invested capital and performance writ large across companies has gotten increasingly wide. And that means that you can have a lot of restructuring and liability management happening, towards the bottom of that distribution, even while the firms at the top of the distribution look to buy other firms in each sector, to expand their own activity. So in other words, the coexistence of M&A and restructuring and liability management, with a different pattern than may have been the case historically. So, we obviously also have other components. We've got Lazard Capital Solutions. We've got a whole variety of other parts of the business that are, in the non-M&A category, but we see significant momentum, frankly, on both sides. We're skirting past the M&A piece because I think as you put it, it's well appreciated, but, obviously important, momentum there also. So we see an increase, maybe the way I would put it is an increasingly diversified and also growing advisory business, a diversified public company, private company, North America, rest of the world, M&A, non-M&A. Peter, thank you for that thorough answer. Really appreciate it. I suppose I should have done this first. Mary Ann, best of luck. Tracy, welcome to the circus here. So would love to touch on the CFO transition. Sure. So I know we have a six-month transition period, but the timeline for Tracy stepping in is rather abrupt. You know, so maybe could you speak a little bit to what has led up to this? You know, if it was normal—if it's normal course, you know, why not maybe telegraph it a little earlier, you know, to allow for a more extended transition? It sounds like it's normal course, but, you know, it... CFO transitions do tend to make investors nervous. So, you know, any additional color around this would be helpful. Thank you. Yeah, this is very much normal course. I wouldn't characterize it as abrupt in any way. I think you're focusing on the effective date, but in a situation in which you have an internal candidate or an internal person who knows all the issues and knows Lazard well, it facilitates a more rapid effective date. But more importantly, as you noted, Mary Ann will be serving as a senior advisor to make this transition entirely smooth. So, we don't view it as abrupt, and I don't think it is. And again, it's a very natural transition. And I just want to, as I said in the script, extend my appreciation to Mary Ann and also the excitement for Tracy joining us. I don't know if they're both here. I don't know if you all want to say anything. I think that's well said. Thank you, Peter. Okay, perfect. All right. Thanks for taking my questions. Thank you. Our next question comes from Mike Brown with UBS. Please go ahead. Your line is open. Great. Good morning, everyone. Thanks for taking my questions. So, Peter, you talked about the sponsor side of the M&A market here and the need for them to return capital to LPs as a strong driver of deal flow in 2026. And we did see the announcements really spike in Q4 from this cohort, but just wanted to hear a little bit more about what are your observations here in terms of broadening out of activity, and, you know, when do you think this can really ramp more meaningfully? And then as we look at the spike of continuation vehicle activity, is there any risk that some of these M&A exits maybe disappoint some of the high market expectations from either a volume or timing standpoint? So, let me try to take both questions. I'd say, with regard to PE activity, we've all been waiting for a heightened level of activity. I do think, based on discussions with the, you know, the tops of the house at a lot of alternative asset managers and more pure play private equity shops also, that 2026 is likely to be the year in which this occurs. I know this has been a little bit of Waiting for Godot. And the reason for that is the one I mentioned, which is LPs that are getting increasingly desirous of some cash return, even outside of the continuation and secondary type approach, along with the, I'd say, narrowing of the kind of bid-ask spread on expectations around valuations. There still is some gap there, and that might get to your - the second part of your question. But again, this is not just what our bankers are saying, but also what the heads of the large alternative asset managers are saying in terms of what is anticipated for activity in 2026. Look, with regard to continuation funds and also secondaries writ large, I think there has been this question about whether the pickup in activity will continue even as, you know, more traditional M&A exits occur. And our belief is the answer is yes. And the reason is that the secondary vehicles are still a relatively small share of... The penetration rate is still relatively low. It's growing, and we think this is going to just be a new permanent feature of the private equity landscape. The diminution of M&A activity as an exit may have helped to, you know, jump-start additional secondaries business, but we think that it- that's a jump-start, not a aberrational increase that will go away. It's going to be a new permanent part of the landscape, and this is one of the reasons why we're really excited about the growth that we're experiencing in our PCA business and our investments for the future in this business. Expect a lot more from us in this area in the years ahead. Okay, great. Thanks for that, Peter. And just a quick follow-up here on the asset management side of the business. So certainly some positive movement in the fee rate here in the fourth quarter. Yeah, is the exit rate from the quarter relatively in line where it was for the full quarter? And as you think about that $13 billion of one and not yet funded, that's a great number. What is the asset mix in that $13 billion, and how should we think about the fee rates versus your blended fee rate? Thank you. I'm gonna let Chris take that. Yeah. Thanks, Mike. This is Chris. So the exit rate was modestly higher than the quarter run rate. The large sub-advised relationship that closed that we reported in the November AUM release obviously happened in November. So that wasn't... And that was a lower fee, you know, significantly lower than our average fee rate. You know, so there's, you know, it didn't hit the full quarter. So it, the exit rate would be modestly higher than the quarter average. As I look at the book of business in that, you know, encouraging $13 billion of one but not yet funded, there's clearly a mix in there. You know, it's predominantly emerging market equities, listed infrastructure that tend to be quite healthy fees. There's also some more of our systematic services that tend to be slightly lower fees. So, you know, as I look at that, you know, mix, you know, I think it's broadly in line with the fee rate that we experienced in the fourth quarter. But, you know, the timing of when those hit and the mechanics will, you know, yeah, there's a little bit of uncertainty around. Okay, sure. Thank you. Thank you for all that color, Chris. Thank you. We will move next with Brendan O’Brien with Wolfe Research. Please go ahead. Your line is open. Good morning, and thanks for taking my questions. I guess to start, you know, while there's clearly a lot of optimism on the M&A outlook, you know, we've seen a notable uptick in geopolitical tensions and political uncertainty within the U.S., a lot of which is likely to only intensify into the U.S. midterms. I just want to get a sense of that, whether you've seen any impact on dialogues from this increased rhetoric and tension, and if you anticipate the U.S. midterms will have any negative impact on activity. So the short answer is, no impact on the corporate discussions that we've been having. But I think the fact of the matter is, I'm gonna come back to this concept of Contextual Alpha. Boards and C-suites recognize that they need to take into account a broader array of variables today, and this is one of the things that's fueling Lazard's rise. We've always been good at this, but we've now professionalized it more. It's deeply integrated into our banking teams and our investment processes, and it's a competitive advantage for us. So, anyway, that's the direct answer on that. On the midterms, I do not anticipate any material change in the environment from the midterms. I think people mostly misinterpreted what the impact would be if there were a shift in, you know, the more likely outcome is that the House shifts. The back half of an administration typically does not involve any big legislation, so I don't think even if the House and Senate were to remain under their current configurations, that you should anticipate any large pieces of legislation. What may happen if the House does flip is that there will be a lot of hearings, there will be a lot of subpoenas, a lot of tension between the legislative branch and the executive branch over executive privilege, and so on. That will all be, you know, a lot of noise, but I don't think it has any direct corporate impact. The thing that could have some corporate impact is some of those hearings and subpoenas may then extend out to increase into what companies have been doing, how they've been interacting with various different players, but we're now getting into, you know, a very speculative zip code. Final thing I'd say is I do think a lot of companies are realizing that the regulatory environment under the current administration is more accommodating to deals. It is also more political, but it is more accommodating. And so I think the more important thing than the midterms is this sense that with regard to the next presidential election, that may or may not shift, and so there's an incentive to try to get deals in and done now while the regulators are willing to consider things that, for example, under the prior administration, I don't think would have even been a debate. That's helpful color. I guess for my follow-up, I just wanted to touch on the comp ratio. You know, I understand that it will be an output of a revenue environment, but just given the robust hiring you've done in 2025 and plan to do in 2026, I just want to get a sense as to how we should be thinking about incremental comp leverage from here if we begin to see better revenue growth, and how we should be thinking about that path back down to that 60% level. Yep. We do anticipate additional operating leverage in 2026, despite the robust hiring. Obviously, as you noted, it's dependent on revenue growth. I'd say it's also very—I mean, it's also, on the advisory side, very sensitive to those ongoing increases in productivity, which is why we're very focused on that variable, because that gives you operating leverage against the non-Managing Director compensation ratio. In addition, one of Tracy's top priorities is going to be to look to create, you know, for additional operating efficiencies in our corporate functions and across the board. And so there are other levers that we're able to deploy to continue to reduce the comp ratio over time. Great. Thank you for taking my questions. Thank you. We will move next with Daniel Cocchiara with Bank of America. Please go ahead. Your line is open. Hello, good morning, and thank you for taking my question. I know it's early, but we've gotten some questions around a slower than anticipated start to the year for M&A, and just given Lazard's global footprint, was hoping you guys can help unpack, you know, some of the trends that you're seeing across geographies in the business, and how your expectations for domestic M&A compares to deal activity outside of the U.S. in 2026. Thank you. Look, it is super early, so I, you know, I would, I would, treat what I'm about to say with low conviction. But at least, you know, with regard to our business, we're seeing a nice build, in January, so, that may be idiosyncratic to us. We'll have to see how it plays out. Very early days. With regard to the geographic mix, I would say US CEOs, seem a bit more confident than, non-US CEOs right now. But we're seeing significant, interest in, transactions both in North America and Europe, and frankly, across, across the globe. The thing that you need to remember about most European companies is, they're, they're – they te – at least the ones that we're interacting with, tend to be global in their, business operations. So while they may be headquartered in Paris or in London or in Frankfurt or wherever, their operations are global, and so they are affected by what's happening across the globe and not just in their home countries. Final thing I'd say is this fracturing of the global economy into a pole around China and a pole around the U.S. with some questions about where the rest of the world kind of goes, that is leading to a lot of discussions with clients about how that affects their own operations. The move towards industrial independence is affecting supply chains and also both selling businesses and buying other businesses. So what I would say is, to the extent that Prime Minister Carney is correct, that we are in a period of what he referred to as rupture in the global economy, that is a time when our clients ask for a lot of assistance and look to a place like Lazard for help in reading between the lines on what's happening. So I, you know, we're engaged in a lot of client dialogue right now. I just want to go back to the first part and the kind of low conviction, because it's very early days, and the uncertainty bands around how the year plays out at this time of the year is always very wide. Thank you. That's very helpful. And as a follow-up, this one may be more for Chris. You've come in and made some personnel changes. I was wondering if, you know, maybe you could spend some time on just discussing what areas you think you see need to see some significant change, and maybe some areas where you actually see some healthy momentum. Thank you. Yeah, thanks, Daniel. So look, I think we've already laid out in our Lazard 2030 strategy, the direction and goals for the Asset Management business. So I think my focus really has to be around execution. That execution really comes down to sort of three areas, the first of which is around delivering for our clients through, yeah, a strong investment performance. You know, I'm encouraged that through last year, our investment performance actually improved sequentially through the year, if you look at the percentage of AUM that's outperforming. But by appointing Eric Van Nostrand as CIO, it puts somebody, you know, a lot of bandwidth there to work with the investors to help them you know deliver good performance, evolve their processes, and ensure that we're really bringing the breadth of Lazard's Asset Management platform to bear. Because, you know, a fixed income investor should be able to help an, you know, an equity investor, and, you know, having Eric as CIO really helps us bring out that breadth of insights across the, you know, across the platform. So we need... First priority is delivering investment performance for clients, but the second is really around growing. The most important thing we can do there is to scale our existing products, so we'll be focusing a lot on that. But then there's secondly, a lot of white space around us, whether that's in traditional markets, privates, or our wealth channel, that over time we'll explore and evaluate the best way to execute on those growth options. And then the third is just ensuring that we drive efficiency in the business so that the growth that comes through is profitable growth. And that's why we appointed Rosalie Berman as our COO to really focus on, you know, you know, a lot of the efficiency and cost control, but secondly, to really ensure that we're integrating AI as wholesomely as we can across our business, in investments, in client experience, and in our operations. So this really is, Daniel, a focus on execution to deliver those Lazard 2030 goals. Thank you. That's very helpful. And Mary Ann, wishing you all the best in your future, and Tracy, look forward to working with you. Thank you all. ... Thanks. Thank you. Thank you. Our next question comes from James Yaro with Goldman Sachs. Please go ahead. Your line is open. Good morning, and thanks for taking the question. I want to dig in a bit further on Asset Management. I think it'd be helpful if maybe you could identify for us some of the moving parts, here, so we can gain a little more comfort on the guidance for positive Net Flows in 2026. Specifically, is there any way that you could give us a little more granularity on the verticals, by asset class, geography, however you wish to define it, within Asset Management that are growing versus those that are shrinking, and specifically, which you view as most material going forward for growth, and where the outflows may be slowing? Sure. So thanks, James. Look, if you think about net flows, it's the difference between two big numbers. So if you look at last year, we had record gross inflows. We also had an elevated level of outflows because of the closure of that large sub-advised mandate that we previously disclosed. As I look forward into 2026, you know, we're budgeting for strong gross inflows again. Our goal, our internal goal is, you know, above the goal that we set for last year. And we don't expect, you know, there's not another large sub-advised client that could close. We wouldn't expect that large level of outflow to repeat. But you know, we'd expect a more normalized level of, you know, of outflows, and then, you know, the net of that should give us confidence around the positive net flows for this year. Secondly, we start the year with a healthy level of unfunded but not yet funded business at $13 billion. You know, within the areas where we're seeing a lot of client interest, it's areas like our emerging markets platform, our systematic platform, our listed infrastructure and real asset platforms, as well as some of our alternatives businesses. And that's where, as I look at the sales goals, that we would expect to see more growth through the year. As Peter said in his remarks, you know, what we are hearing, I hear this as I meet with asset owners around the world, you know, we are starting to see asset owners looking to diversify away from the U.S. into international markets, and we feel well positioned, given the services that we have and the investment performance we're delivering in those services. It's a benefit from that diversification as it comes through. That's super helpful. If I can just add really- Sorry. Yeah, James, just really quickly, you know, the reason that about this time last year, we were flagging this, the sub-advised, account, was because that was, something that we knew had, performance issues and challenges and was at some risk. Now, while there may be normal puts and takes and, you know, you have to see, there is no flashing red concentration like that. The business is much more diversified, as a result. And so just to underscore what Chris was saying, we not only see significant investor interest in the quantitative, in the, emerging market and in customized solution type of, products and strategies that we offer, but we also don't have, you know, a concentrated risk. There may be outflows that occur, but it's not as... We're not highlighting something for you like we did last year. Excellent. Super helpful, there. Maybe just one other one for you, Peter. Could you just help us think through the secondaries outlook from here? Do you expect the strong CAGR in the business we've seen over the past three years, three to, let's say, three to five years, to, to slow at all, in 2026? The short answer is, I think I may have mentioned before, is we don't anticipate any slowing. And the reason is, I understand the rationale behind asking the question, which is, as M&A picks up, you know, does the secondaries business slow? The reason we don't think that's a material part of the outlook, while it may be true in some isolated situations, is because the penetration rate of secondaries in this space remains relatively modest, you know, well under 50%, and, you know, probably closer to, we can get you the exact number, maybe a third or so. So there's lots of room for that to continue to expand as part of the landscape of private equity, and we think it's just becoming a more normal part of the marketplace, and so is here to stay. Very helpful color. Thank you so much. Thank you. We will move next with Ryan Kenny, with Morgan Stanley. Please go ahead. Your line is open. Hi, good morning, Chris and Tracy. Welcome to the call. Congratulations and best of luck to all. I have another one on the Asset Management side. So when we think about the growth drivers that, Chris, you just walked through, how do you think about inorganic opportunities to get there, and what would be the framework on any inorganic opportunities that come your way? I think, you know, firstly, we will always look at inorganic opportunities, but we would want to look at them quite carefully to see, you know, is it additive to what we have? Is there an attractive return stream? Is that a result or a, you know, robust process that we can believe in? Is it a cultural fit? Can we get the economics to work? And that narrows the funnel down, you know, pretty quickly. So while there are a lot of opportunities out there, you could expect that we're going to be super, you know, super selective. ... as Eric gets settled into his seat, and I, you know, bear in mind, this is my second month, too, you know, we will start to, you know, really kind of put together a framework of the highest priority areas, you know, for us to look into. And, you know, very happy to come back later in the year to sort of share more thoughts on that. But look, inorganic is something that, you know, we'll look at, but we'll be highly selective at looking at any opportunity. But we do see, you know, broadly, the three drivers around us in public markets, privates, and then our wealth channel. Got it. Separately, a question on restructuring. What's the view on where we are in the restructuring cycle? We've heard from some peers that maybe we're in an ebb period. Do you think restructuring has peaked, or is there more growth ahead? Well, as I again said earlier, I think that we're in a different environment now than we were than may have been the case in past cycles, because there has been a very important, and I think, little-noticed change in the landscape of companies. Companies have increasingly grown disparate in terms of their performance. So if you look at... Take any metric you want, return on invested capital, whatever, in terms of corporate performance, the ninetieth percentile is pulling away from the fiftieth percentile in each sector, and the tenth percentile is falling relative to the fiftieth percentile. This is different than it was 10 or 20 or 30 years ago, and it means that there's a very important shift in the correlation between M&A cycles and restructuring and liability management cycles. This is beyond the shift within restructuring and liability management towards the latter term and away from the former term. Because those companies at the tenth or twentieth percentile that are falling increasingly behind the frontier firms in each sector need liability management and restructuring assistance. So, we are seeing continued activity. I mean, that continues in our own business. But I think the other point is, I think the marketplace is different because of this increased spread across companies. And so, I'd also note, by the way, that that increased spread also creates a very strong incentive for mergers and acquisitions, because the firms that are at the frontier have a big incentive to try to take over the ones that are at the, you know, the median and then improve performance. In fact, if you look at research from Nick Bloom at Stanford, you get massive efficiency benefits from mergers and acquisitions because of exactly what I just said, which gets accentuated as the spread between the top firm and the you know the firm in the middle goes up. Great. Thank you. Thank you. We will move next with Devin Ryan with Citizens Bank. Please go ahead. Your line is open. Thanks. Good morning, Peter, Mary Ann, and welcome, Chris and Tracy. Question on kind of the productivity discussion, and appreciate all the additional detail, Peter, and kind of the updated framing. I also appreciate it. It's an output with a lot of moving parts into it. You have a big recruiting year, it might dip down, but the productivity of the existing group is improving. So to that point, can you just talk a little bit about, you know, when you're underwriting somebody that you're bringing in externally, you know, what should that person be doing once they're ramped relative to the blended average? I mean, can they increase that because of bringing on kind of a pound-for-pound higher productivity? And then, you know, I know you're operating an integrated strategy, but just talk a little bit about the productivity potential between businesses, whether it's private capital or restructuring. Just trying to understand, you know, if there's any mix shifts here, could that also change the trajectory one way or another? Thanks. Sure. So on the first one, look, we've actually, as we have brought on a large number of new managing directors, we also believe that we have really upped our game on the diligence that we apply, and therefore, the quality of the people that we're bringing in. And the result is that, the so-called ramp may be a bit faster than in the past. We have had. Actually, we had an example from, I think it was last week, where one of the new managing directors that we've brought on in the last couple of months already has two new mandates, which is, I don't know if it's a record, but, you know, it's a very rapid ramp. But these things do vary, and in general, and on average, obviously, you become more productive after you settle in and get used to the platform and are able to... It takes time for clients to switch over and so on and so forth. So there's, you know, on average, there still definitely is a ramp. And by the way, that's why, let me just highlight that. That's why as we move from 40% of our managing directors being within the first three years of being on the platform down to a more normalized level of 30, there's an additional kind of coiled spring effect that will play through on our productivity. I had been anticipating that that would happen partially in 2025. It did not, because we had so many opportunities to grab exceptional talent. So the ahead-of-schedule productivity we accomplished in 2025 was despite not benefiting from that kind of ramp down in the share that of bankers that are, you know, quote, "On the ramp." That is still yet to come, which is great. And then with regard to the different parts of the business, there's not I, I wouldn't say there's any material difference between the non-M&A and M&A parts. One thing that is noteworthy is that on average, and this is not individual by individual, but on average, productivity tends to be a bit lower outside of the U.S. than in the U.S. I tend to remind our bankers that's not because the U.S. bankers are, you know, more talented, more charming, whatever. It's because the fee levels tend to be higher for the same deal size in the United States, and the result of that is somewhat higher productivity on average and over time in North America relative to other geographies. But no, no massive difference between non-M&A and M&A bankers. And we often do have very... You know, if you look at the very top of our productivity, you know, the top 10, 20, 30%, that is also tends to be a mix of M&A and non-M&A bankers. So it's not just the average, but also the top performers tend to, you know, come from both sides. Yeah. That's great. Thanks, Peter. Really appreciate the detail there. And then, as a follow-up, love to ask about AI and the investments you're making. You've been talking about this for a couple of years, so it's not new thematically, but you know, I recall you mentioned some of the investments. I still think it's a bit abstract from the outside as people think about applications to your business. And so, the question is, do you think what you're doing will be table stakes in the market, or do you think you're leading, meaning this could actually drive an increased impact with clients or increase market share for the firm over the next you know, few years? Anything else you can just share about kind of tangible areas of success or opportunity where you feel like you can really differentiate? Thanks. Sure. Let me tackle it in a couple of different ways. I believe that we're at the forefront. I don't think that, you know, that that's... I believe that we're at the forefront, but I also believe that other firms will follow, and so this is a advantage, but it's not one that, you know, others won't replicate and try to follow. So I think the goal here is to always remain one step ahead. I would note, for example, I think we are the only firm on Wall Street that has on our board someone who is native to AI in the form of Dmitry Shevelenko, the deputy of Perplexity. That's one small marker of what we're doing relative to, you know, the peer set. With regard to what it can do, I'll give you a few examples. So in my own experience, let's just talk about my day-to-day. What are some of the applications? First, I'll reveal that the terminology Contextual Alpha, which I think describes Lazard's—what Lazard brings to clients in a very apt way, actually comes from an LLM. About 3 or 4 or 5 months ago, I was inquiring how to describe what Lazard does, and it, and not a human being, suggested the terminology Contextual Alpha. So there's one small example. My daily briefing is now increasingly done in the first instance with artificial intelligence, and then supplemented by humans that look over it, as opposed to being entirely human drawn or human done. I was at two different C-suite board-level discussions the day before yesterday. In both cases, the deck that we pre-presented, I loaded into an LLM, and I was querying it in terms of how will the board respond to this? What's new here that the CEO hasn't spoken about publicly, et cetera. It makes it a much more interactive form of preparation for the meetings, as another example, and so on and so on. I could, I could keep going, but the fact of the matter is, it is infused in my own daily experience as the CEO of this firm, and I think that's increasingly what's happening across the board with our ability to gain insights from our CRM, our ability to take out some of the mechanical rote parts of the job, and then lift people up so that they can do higher value-added work, and so on and so forth. So I think the question then becomes, so what? How is this going to improve our ability to serve our clients? And I think the answer is gonna be that at its heart, we would love to be able to focus on those parts of the job that we think add the most value. That is, the curiosity that leads you to ask good questions, because as Dmitry Shevelenko puts it, "Answers will become commoditized. The ability to ask insightful questions will not." So encouraging that curiosity, which we think has always been part of Lazard, will be, will allow us to continue to serve our clients, in an effective way. Putting increased focus on personal relationships and, connectivity with clients, so increased convening, increased time directly in person, because trust and judgment, are going to be difficult to, for the LLMs to replace because, they lack context, they lack the subtle, in-person signals that you can get. So we're encouraging our bankers to, even more so than in the past, go out and, spend time in person with clients, and so on. So we're really excited about this, technology in the form... In its ability for us to deliver high-quality advice, trusted advice, and judgment to our clients. We also think it will be an important part of Tracy's efforts to drive more efficiencies throughout our back office, and frankly, even some of the ways in which we support our clients. ... Excellent. Thank you so much. Thank you. We will take our last question from Alex Bond with KBW. Please go ahead. Your line is open. Hey, good morning, everyone. Thanks for fitting me in here. I actually have a follow-up question on AI and how it specifically relates to comp leverage. You know, I realize it's still early days here, but can you share how you're thinking about AI-related comp leverage, maybe the timing around when we could see this show up in the comp ratio, and then also maybe the potential magnitude of that impact? Yeah, look, I think, there are a couple of different ways of thinking about that question. One is, to the extent that the tools and using them in the ways that I just mentioned, you know, additional insight with regard to clients, additional, you know, coming into a meeting even better prepared than may have been the case in the past, that that raises productivity per MD, which we believe it will. That's one way of getting operating leverage, because the higher the productivity per MD, the lower the non-MD comp ratio tends to be. Secondly, though, you know, over time, we do think that this this technology is likely to lead us to, to be able to have a smaller team associated with each managing directors, each managing director. Again, we're going to be expanding our total managing director size over time, as I previously articulated. So, what happens to the aggregate number might be unclear, but with each managing director on each client, we think the teams could be smaller. That provides a lot of upward mobility to our analyst associates, VPs, and directors in terms of taking on additional responsibilities. We think that's a feature, not a bug, because it allows us to cultivate the skill set, trust, judgment, curiosity, that leads to effective managing directors over time. And so the hope is, and we're spending a lot of time designing our HR and other systems to be able to encourage this, that as the opportunity to, I call it, practice at the top of your license, a smaller team allows more upward trajectory in the responsibilities, that we're going to be even better at cultivating and picking out those people that we think are really promising future managing directors. Got it. No, that's helpful color. And then just for a quick follow-up, and apologies if I missed this in the script, but did you provide any non-comp expense guide for 2026? And if not, maybe if you could help us size up what the right growth rate is there for the full year ahead. Thanks. Ann will take that. Yeah, I'll take that one, Alex. So the way I think about it is that you should expect us to make continued investments and growth on both sides of the business, whether that's client development, staying on the cutting edge of technology, et cetera. So I would probably be expecting kind of mid- to high-single-digit increase in dollars, depending on how FX rates evolve throughout the year. And importantly, that we're aiming to get back into our target range in 2026 as the revenues grow in both businesses. Okay, great. Thank you. Thank you. This concludes Lazard's fourth quarter and full year 2025 earnings conference call. Thank you for your participation, and you may now disconnect.