July 30 (Bloomberg) -- Lazard Ltd., the investment bank led by Bruce Wasserstein, said profit rose 5 percent as the value of takeovers the firm advised on almost doubled from a year ago.

Second-quarter earnings to $64.6 million, or 54 cents a share, from $61.5 million, or 53 cents, a year earlier, the company said in a statement today. That beat the 52-cent average by eight analysts surveyed by Bloomberg.

Lazard benefited from merger and acquisition advisory revenue on deals valued at about $55 billion in the quarter, up from $26 billion a year earlier, according to data compiled by Bloomberg. Revenue from asset management increased 11 percent in the quarter to $178.8 million. Competitors Morgan Stanley, Merrill Lynch & Co. and Lehman Brothers Holdings Inc. all reported lower-deal related revenue.

``The expectations for overall strategic M&A have gotten just a little too low,'' David Killian, a money manager at Valley Forge Advisors LLC, which oversees about $600 million, said before results were released. ``M&A volumes should surprise to the upside going forward. Their asset management division continues to plug along and bring in new assets.''

Lazard fell 8 cents to $39.01 in New York Stock Exchange composite trading as of 9:49 a.m. The shares dropped 4 percent this year through yesterday, compared with a 6 percent decline for rival Greenhill & Co. and a 42 percent drop for Evercore Partners Inc.

Wasserstein `Pleased'

The results come as total announced deals globally this year dropped by 35 percent to $1.84 trillion as corporate takeovers slow.

``We are pleased with the performance of our business in these turbulent times,'' Wasserstein, 60, said in the statement. ``Our core operating business of financial advisory and asset management achieved strong results, despite the ongoing softening of the markets.''

The firm completed 40 deals in the quarter, including advising Bear Stearns Cos. on its $1.4 billion sale to JPMorgan Chase & Co., Trane Inc. on its $10.1 billion sale to Ingersoll- Rand Co. and Resolution Plc's 5 billion pound ($9.9 billion) sale to Pearl Group Ltd. The pace is down from 71 deals a year ago.

Wasserstein, a former corporate lawyer, rose to the top ranks of merger advisers during the 1980s, helping run investment banking at First Boston Corp., now part of Credit Suisse Group. In 1988, he left with Joseph Perella to found Wasserstein, Perella & Co., an advisory firm that he sold to Germany's Dresdner Bank AG for $1.56 billion in January 2001.

Beer Deal

Michel David-Weill, a descendant of Lazard's founding family, hired Wasserstein in 2001 to revive the company. Wasserstein recruited more bankers and, over David-Weill's objections, sold shares in the firm to the public for the first time in May 2005 for $25 each.

Lazard today listed 20 transactions it's working on that haven't yet been completed. The company announced 53 deals in the quarter, valued at $93.2 billion, according to Bloomberg data. Assignments included advising Inbev NV on its $52 billion agreement to buy Anheuser-Busch Cos. and Corn Products International Inc. on its $4.4 billion sale to Bunge Ltd.

The company worked on more than $100 billion of announced transactions in July, Vice Chairman Steven Golub said in an interview today. Second-quarter operating revenue from financial advisory services rose 18 percent to $289 million as fees from takeover advice advanced 37 percent to $225.1 million.

Restructuring Work

``Our revenue has continued to do pretty well in spite of a significant decline in volume out there for the industry as a whole,'' Golub said.

Revenue from advising on financial restructurings -- working with bankrupt or near-bankrupt companies -- climbed 12 percent to $32.7 million as bankruptcies increase with the slumping economy. It advised Movie Gallery Inc. and Plastech Engineered Products Inc. on bankruptcy proceedings.

Average assets under management were little changed at $134.1 billion. Net inflows in the second quarter totaled $2.6 billion.

``Although this year's record first-half and second-quarter revenues are stronger than the same periods in 2007, the second half of the year remains uncertain because the markets remain unpredictable,'' Chief Financial Officer Michael Castellano said in the statement.

Headcount Rises

Morgan Stanley, the second-biggest U.S. securities firm by market value, said last month that investment banking revenue, which includes merger fees and income from underwriting stock and bond offerings, fell 49 percent to $875 million. Lehman's merger and acquisition advisory revenue dropped 33 percent to $200 million. At Merrill Lynch, the third-biggest securities firm, strategic advisory revenue fell 20 percent to $317 million.

Lazard plans to hire in its financial advisory and asset management business this year, Golub said. ``Our headcount has actually grown a little bit,'' he said.

Separately, State Street Corp., the third-largest custodian of financial assets, said today it will hire about 70 employees of Lazard's asset-management unit as part of a contract to settle trades, track portfolios and prepare client reports for the firm. Terms weren't disclosed.

Lazard's current and former employees own more than half of the firm through a holding company called LAZ-MD. Because the stakes can be converted into common stock, the company reports earnings as though the stakes were fully exchanged instead of treating them as minority interest.

Without making those adjustments, second-quarter net income rose 17 percent to $34.3 million, or 54 cents, from $29.3 million, or 52 cents, a year earlier.

To contact the reporters on this story: Josh Fineman in New York at jfineman@bloomberg.net.

Last Updated: July 30, 2008 09:57 EDT