Lazard Capital Markets LLC, the closely held brokerage controlled by current and former Lazard Ltd. (LAZ) employees, is exploring a sale or forming a joint venture, according to a spokesman.
Lazard Capital, spun out amid Lazard Ltd.’s 2005 initial public offering, also may seek a partner to inject capital or could sell a minority stake as its owners seek to increase the value of the franchise, Scott Sunshine, a spokesman for the New York-based broker-dealer, said in a phone interview. No decision has been made, he said.
Wall Street firms have considered changing ownership structures and strategies as commissions get squeezed. Money managers are trading less and doing more of it electronically, and customers have resisted paying for investment recommendations. Firms registered with the Financial Industry Regulatory Authority dropped 7.1 percent to 4,251 in April from the end of 2010.
Lazard Capital, led by Chief Executive Officer William Buchanan, cut six senior research analysts in December, people familiar with the matter said at the time. The firm had more than $1 billion in assets and about $73 million of equity at the end of 2012, according to regulatory filings. Hamilton, Bermuda-based Lazard Ltd., the largest independent merger adviser, has a separate capital markets advisory business.
Lazard Capital employs about 200 people who provide research, sales and trading, along with underwriting for equities, fixed-income and convertible securities, according to its website.
The firm was a co-manager for April’s $702 million initial public offering of SeaWorld Entertainment Inc. (SEAS) and the $102 million offering of Chimerix Inc. (CMRX), according to data compiled by Bloomberg. Lazard Capital helped oversee $2.12 billion in 23 IPOs during the past 12 months, the data show.
When Lazard Freres & Co. became publicly traded in 2005, the asset-management and advisory operations became Lazard Ltd. Its alternative-asset and capital markets businesses were folded into a shell company owned by management called LFCM Holdings LLC, according to regulatory filings. Lazard Capital is a wholly owned subsidiary of LFCM, Sunshine said.
Lazard Capital pays client referral fees to Lazard Ltd. and also pays to license the brand name. The broker-dealer explores its options from time to time, Sunshine said.