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Fitch revises outlook on Lazard Group to positive

Fitch Ratings has revised the outlook on Lazard Group LLC to positive from stable and affirmed the BBB+ long-term issuer default rating.

Fitch said the revised outlook is the result of the company's continued strong positioning as an independent financial adviser and stronger diversification in earnings compared with peers, and is supported by the investment management business' growing scale, consistently strong profitability margins, and improving cash flow leverage resulting from EBITDA expansion.

Lazard's "significant franchise" as a global independent financial adviser and investment manager, a balance sheet-light business model, relatively low cash flow leverage, good interest coverage and strong operating performance led to the affirmation. However, the cyclical nature of the company's business, a higher compensation ratio compared with peers, and a concentration of assets under management in emerging market equities prone to volatile periods constrain the ratings, Fitch said.