By Anirban Sen
NEW YORK (Reuters) -Lazard Ltd CEO Ken Jacobs is expected to step down from his role and hand the reins to Peter Orszag, who currently runs the investment bank's financial advisory unit, a person familiar with the matter said on Thursday.
Jacobs' decision to step down comes after Lazard (NYSE:LAZ) reported a loss in the first quarter as dealmaking activity slumped. Lazard has warned of an uncertain outlook for the rest of the year and plans to eliminate around 10% of its workforce.
Lazard's stock has lost about 17% this year, giving the independent investment bank a market capitalization of just over $3 billion.
Over the past decade, it has lost market share to newer boutique advisory firms such as Centerview Partners, Evercore, and PJT Partners (NYSE:PJT) Inc, and in recent years it has slipped in league table rankings.
Lazard lead director Richard Parsons (NYSE:PSN) said in a statement that the bank has had a succession plan in time for some time but did not provide further details.
Orszag, 54, previously was head of North America M&A at Lazard and joined the bank from Citigroup (NYSE:C) in 2016. Prior to his career in investment banking, Orszag held numerous senior roles in the U.S. government under the Obama administration.
In recent weeks, Lazard led by Orszag played a crucial role in advising First Republic Bank (OTC:FRCB) on its sale to JPMorgan Chase & Co. (NYSE:JPM)
Jacobs, 64, joined Lazard from Goldman Sachs Group (NYSE:GS) in 1988 and took over as CEO in 2009 after the death of his predecessor, Bruce Wasserstein. He is expected to stay on at Lazard and continue to work with clients, the source said.
So far this year, global mergers and acquisitions activity has shrunk to its lowest level in more than a decade, according to data from Dealogic, as market volatility, a tough regulatory environment, and rising interest rates have stopped several deals in their tracks.
Investment banking units at large Wall Street firms such as Goldman Sachs and Morgan Stanley (NYSE:MS) have cut bonuses and laid off staff in recent months.
The Wall Street Journal first reported on the succession.