Brokerage firm Lazard Capital Markets LLC has begun weighing various strategic options including a minority outside investment, sale or joint venture, company spokesman Scott Sunshine told Bloomberg in a phone interview. Privately controlled by the former and current employees of Lazard Ltd (NYSE:LAZ), the broker-dealer plans to increase the value of the franchise.
Lazard Capital Markets LLC was spun off during Lazard Ltd (NYSE:LAZ)’s initial public offering in 2005. The brokerage firm has previously explored various strategic options, and the current one is a “routine” testing, the spokesman said. So the company has started exploring options again, but it may not result into a deal.
Worsening Brokerage Market
Wall Street brokers are increasingly revisiting their ownership structure and strategy amid narrowing commissions in the brokerage industry. Investment firms are trading less frequently, and now customers don’t want to shell out money for investment recommendations. In December, Lazard Capital eliminated six senior research analyst positions. According to SEC filings, the brokerage firm had about $1 billion in assets and $73 million in equity.
Roots of Lazard Capital
Led by William Buchanan, Lazard Capital has over 200 employees, providing a wide range of underwriting, trading and research services. Lazard Capital was involved in managing the $702 million initial public offering of the theme park chain SeaWorld Entertainment Inc (NYSE:SEAS) and $102 million IPO of Chimerix Inc (NASDAQ:CMRX). Lazard Ltd (NYSE:LAZ) also operates its separate capital markets advisory business.
In 2005, when Lazard Freres & Co. was listed, the advisory and asset management business became Lazard Ltd. (NYSE:LAZ). The capital markets and alternative assets businesses were owned by holding company LFCM Holdings LLC. Lazard Capital Markets LLC is a unit of LFCM Holdings LLC.
LFCM’s stake in the broker-dealer firm is over 75 percent, according to the regulatory filings. Lazard Capital CEO William Buchanan, CFO William Rosenberg, and chief compliance officer Robert Lagay each own less than 5 percent in the company.
Lazard Ltd (NYSE:LAZ) shares were down 0.84 percent to $34.27 at 12:56 PM EDT.