A reconciliation of these non GAAP financial measures to the comparable GAAP measures is provided in our earnings release and investor presentation. We are pleased to report strong performance and results with total firm wide adjusted net revenue of $1,400,000,000 for the first half of the year. Financial Advisory achieved a record first half of the year with adjusted net revenue of $861,000,000 Advisory revenue this year has demonstrated the geographic and product diversity of our business. Results represent the overall strength of Lazard's team and brand, which includes record revenue in France and Germany for the first half of the year.
Over the past twelve months, revenue associated with private capital has been over 40% of total financial advisory revenue, reflecting our increased emphasis on this business and hiring over time. Asset Management continued to deliver solid results with adjusted net revenue of $533,000,000 for the first half of the year. I'll share more on our outlook shortly, but first let me turn the call over to Mary Anne to provide further details on the quarter's results. Today, we reported second quarter firm wide adjusted net revenue of $770,000,000 up 12% from the same time last year.
Increase in firm wide revenue was driven by our Financial Advisory business. Financial Advisory adjusted net revenue was a record $491,000,000 for the second quarter, up 20% from one year ago. Completed transactions include CD and R's acquisition of a controlling 50% stake in Sanofi's consumer health unit and Rocat Freres acquisition of IFF Pharma Solutions. Turning to asset management for the second quarter, adjusted net revenue was $268,000,000 up one percent compared to the second quarter last year and up 2% on a sequential basis.
| Metric | Period | Current guidance |
|---|---|---|
| Full-year effective tax rate | FY2025 | mid-20% range (set) |
| Non-compensation expense growth (dollar basis) | FY2025 | high single digit (raised) |
| Net flows (Asset Management) | FY2025 | flat flows (stretch goal, still within reach) (reaffirmed) |
| Net financial advisory MD additions | through 2030 | on track to achieve or exceed 10 to 15 net per year (reaffirmed) |
| Metric | YoY | Note |
|---|---|---|
| Firm-wide adjusted net revenue | +12% | Increase driven by the Financial Advisory business. |
| Financial Advisory adjusted net revenue (Q2) | +20% | Banking teams performed well across the firm with participation in marquee transactions; record revenue in France and Germany for the first half. |
| Asset Management adjusted net revenue (Q2) | +1% | Management fees up 1% as lower average AUM was more than offset by higher average fees. |
| Average AUM (Q2) | -3% | Lower average AUM versus the 2024 period, partially offset by 3% sequential improvement. |
| Adjusted effective tax rate (Q2) | 36.5% vs 14% | Higher tax rate compared with the second quarter of 2024. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Diversification into private capital / non-M&A advisory | ongoing emphasis and hiring over time | private capital over 40% of advisory revenue; business mix roughly 60% M&A / 40% non-M&A | Rising |
| Improving M&A and advisory environment | watchful waiting mindset in the prior quarter | increasingly constructive environment with broadening dialogue and faster average time to close | Rising |
| Asset Management inflection / net flows | stretch goal of flat flows for the year set earlier in 2025 | positive net flows in the quarter and record first-half gross inflows | Rising |
| Senior talent recruiting | 10 to 15 net MD additions per year toward 2030 | 14 financial advisory MDs hired year to date, on track to meet or exceed the target | Rising |
| AI as a transformational driver | tools deployed inside the firewall for bankers | AI advancing faster than anticipated; four-part strategy spanning tooling, culture, knowledge digitization and deeper client relationships | Rising |
| Restructuring and liability management | predominantly debtor-based restructuring historically | shift toward liability management and a roughly 60/40 debtor-creditor balance | Rising |