Lazard reining in wealth management unit

Lazard Ltd. is folding its U.S. wealth management business into a larger unit as part of a cost-cutting initiative announced in the third quarter. The decision comes just three years after the business was launched as a subsidiary. “The wealth management business in the U.S. is becoming part of Lazard Asset Management,” Lazard spokeswoman Judi Mackey confirmed. Though the New York-based investment bank and advisory firm isn't closing the business, it's unclear if the move will result in job losses for advisers. Lazard does not break out numbers for its U.S. wealth management business, but it is far smaller than the European business, which operates under the name Lazard Freres Gestion. Ms. Mackey provided no further details about the move. Lazard is known primarily for its mergers and acquisitions advisory business and its investment banking operations. Still, the global asset management division had $160 billion in assets under management at the end of September. Lazard started the U.S. private wealth management business in 2009, but it has not reported performance for the subsidiary separately from the asset management group. It brought in Thaddeus Shelly, a former Bessemer Trust executive, to lead the unit, but the firm has been quiet on the recruiting front, said Danny Sarch, president of recruiting firm Leitner Sarch Consultants Ltd. “They have the wonderful name in investment banking, and everyone thought it would be great if they were in wealth management,” Mr. Sarch said. “But it seems they were just dabbling in the business rather than being committed to it.” Lazard's senior leadership appears to have lost patience with the dabbling. “We are implementing cost-saving initiatives to reduce the firm's expense base and enhance our operating leverage,” Lazard chief financial officer Matthieu Bucaille said in a third-quarter earnings release. “These include streamlining our support functions and eliminating investments in areas of low return.” How far the streamlining of the business extends is not yet clear. Mr. Shelly was not made available for comment.