Aug. 18 (Bloomberg) -- Lazard Ltd., the investment bank led by Bruce Wasserstein, hired Goldman Sachs Group Inc.’s Thomas Tuft to advise companies on initial public offerings, suggesting the market for IPOs may be returning.

Tuft, who counseled Lazard on its own IPO in 2005, will join in November as chairman of Global Capital Markets Advisory and vice chairman of U.S. investment banking, the firm said in a statement today. Tuft, 62, joined Goldman Sachs in 1976 and helped start its equity capital markets division in 1985. He was named a partner in 1986.

Lazard is countering a slowdown in mergers and acquisitions by expanding its equity capital markets and restructuring operations. The Hamilton, Bermuda-based firm has said it worked on nine of the top 10 bankruptcies this year. IPOs have all but dried up since the credit crisis last year sent stock market indexes to their worst annual losses since the Great Depression.

“I expect we will do more of this in the future than less, but we are not going to change our model,” Kenneth Jacobs, chief executive officer of Lazard North America said in an interview. “Lazard is a not a capital intensive business. We do not take risk in Lazard.”

Companies raised $11.4 billion in IPOs in the first half of this year, 85 percent less than in the same period last year, data compiled by Bloomberg show. Private equity firms are likely to lead a rebound in offerings as they sell companies to return money to investors, bankers at JPMorgan Chase & Co. and Bank of America Corp. have said.

Lazard’s Underwriting

“There is demand for companies to come public,” said David Menlow, president of IPOFinancial.com in Milburn, New Jersey. “The fact that we haven’t seen that many is not an indication that the companies are not out there ready to come public.”

Lazard hasn’t been an underwriter on an IPO this year, according to data compiled by Bloomberg. The firm has received credit for one secondary offering this year, selling shares for Iconix Brand Group Inc.

Lazard Capital Markets was an underwriter on IPOs earlier this year for Mead Johnson Nutrition Co. and CDC Software Corp., and secondary offerings for Onyx Pharmaceuticals Inc. and Transatlantic Holdings Inc. Lazard also advised Haas family trusts in structuring and placement of securities to replace cash in the sale of Rohm & Haas Co. to Dow Chemical Co.

‘Wall of Debt’

Lazard expects to benefit from a “wall of debt” that’s coming due between 2012 and 2015 as a result of securitizations and financial sponsor deals, Jacobs said.

“We think that wave of activity is going to lead to a demand for advice on capital structure and demand for advice on how to raise equity and we intend to be a significant factor in providing that advice,” he said.

Goldman Sachs spokeswoman Joanna Carss declined to comment on Tuft’s departure.

“Tom is one of the most highly regarded professionals on Wall Street,” Wasserstein said in a statement today. “Advising clients regarding capital structure and financing needs is a key growth area for the firm.”

Lazard “may have realized that with Bear and Lehman out of the way, the universe of what is called major underwriters continues to shrink,” Menlow said. “Lazard might be a wonderful alternative and in the process build on what is generally thought upon to be a profitable revenue stream.”

The firm’s earnings dropped 33 percent in the second quarter to $43.1 million, the firm said in July. Revenue declined 20 percent to $375.6 million in the period. The merger industry may take about four years to return to its previous highs, Wasserstein said on July 29.

Lazard rose $1.47, or 4 percent, to $37.98 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have risen 28 percent this year through today.

To contact the reporters on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.netJosh Fineman in New York at jfineman@bloomberg.net.

Last Updated: August 18, 2009 16:09 EDT