Abu Dhabi’s sovereign wealth fund ADQ held detailed talks to take Wall Street investment bank Lazard private, in a move that underlined the oil-rich emirate’s ambitions to acquire a western financial services company.
The talks were held this year between Lazard, led by outgoing chief executive Ken Jacobs, and ADQ, led by Sheikh Tahnoon bin Zayed al-Nahyan, the fund’s chair and Abu Dhabi’s powerful national security adviser, said people with direct knowledge of the matter.
Negotiations fell apart after both sides walked away from a deal. Lazard, which is best known for its advisory business in Paris, New York and London, had been focused on maintaining operating independence, one person added.
Lazard said: “As you’d expect, we talk to people all the time but we don’t comment on speculation.” ADQ declined to comment.
A deal would have marked the end of a remarkable 175-year run for Lazard as an independent financial house that withstood world wars, massive shifts in the global economy and various tensions between its larger-than-life rainmakers on both sides of the Atlantic.
It would also have followed the Rothschild family’s move in February to take its investment bank private in a step that valued Rothschild & Co at €3.7bn. And in May, Japan’s Mizuho agreed to buy boutique investment bank Greenhill & Co in a $550mn deal to kick-start its ambitions in the US.
Since the talks ended, Lazard has embarked on a succession process with Jacobs, who has led the firm since 2009, set to become its executive chair. Peter Orszag, an economist and former official in Barack Obama’s administration, will take over as chief executive in October.
Lazard announced in April that it had cut about 10 per cent of its workforce because of a deep chill in dealmaking activity and high costs from recruitment during the pandemic. In a separate unit of its business, Lazard manages about $200bn in assets.
Shares in Lazard have fallen 8 per cent since the start of the year, giving the company a market value of $3.7bn.
Beyond his national security brief, Tahnoon has a sprawling business empire spanning both government and private interests. He chairs the Abu Dhabi Investment Authority, the emirate’s main sovereign wealth fund with around $850bn of assets under management; the country’s largest lender, First Abu Dhabi Bank; and state holding firm, ADQ.
He also chairs International Holding Company, the fast-growing conglomerate that has puzzled bankers with its stratospheric rise on the Abu Dhabi stock exchange over the past few years.
The emirate has shown a desire to increase its presence in financial services in recent years as the capital of the United Arab Emirates ramps up its plans to diversify its economy away from hydrocarbons.
The Financial Times reported in March that Tahnoon had expressed interested in buying Silicon Valley Bank’s UK subsidiary, which ended up being acquired by HSBC in a weekend fire sale.
Late last year, FAB worked on an audacious attempt to acquire Standard Chartered Bank, but the Abu Dhabi lender said it was no longer evaluating an offer when news leaked. FAB could still revive its approach after a cooling-off period ends this summer.
FAB in 2022 launched an unsuccessful bid to acquire a controlling stake in regional investment bank EFG Hermes of Egypt. ADQ has since acquired a $911mn stake in Egypt’s Commercial International Bank, as part of a broader investment package into the troubled economy of the North Africa country, a strong UAE ally.
ADQ has also teamed up with General Atlantic in an attempt to create the largest alternative investment manager in the region, managing money in private equity, venture capital and credit for ADQ, IHC and another Abu Dhabi fund.