Fair Value Hierarchy of Investments and Certain Other Assets and Liabilities—Lazard categorizes its investments and certain other assets and liabilities recorded at fair value into a three-level fair value hierarchy as follows:

Level 2.Assets and liabilities whose values are based on (i) quoted prices for similar assets or liabilities in an active market, or quoted prices for identical or similar assets or liabilities in non-active markets, or (ii) inputs other than quoted prices that are directly observable or derived principally from, or corroborated by, market data.

Level 3.Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect our own assumptions about the assumptions a market participant would use in pricing the asset or liability. Items included in Level 3 include securities or other financial assets whose trading volume and level of activity have significantly decreased when compared with normal market activity and there is no longer sufficient frequency or volume to provide pricing information on an ongoing basis.

The fair value of equities is classified as Level 1 or Level 3 as follows: marketable equity securities are classified as Level 1 and are valued based on the last trade price on the primary exchange for that security as provided by external pricing services; equity interests in private companies are generally classified as Level 3.

The fair value of investments in alternative investment funds, debt funds and equity funds is classified as Level 1 when the fair values are based on the publicly reported closing price for the fund, or Level 2 when based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

The fair value of investments in certain private equity funds is classified as Level 3 for (i) certain investments that are valued based on the potential transaction value and (ii) when the acquisition price is considered the best measure of fair value.

The fair value of the contingent consideration liability is classified as Level 3. The contingent consideration liability is initially recorded at fair value on the acquisition date and is included in “other liabilities” on the consolidated statements of financial condition. The fair value of the contingent consideration liability is remeasured at each reporting period. The inputs used to derive the fair value of the contingent consideration include the application of probabilities when assessing certain performance thresholds for the relevant periods. Any change in the fair value is recognized in “amortization and other acquisition-related costs” in the consolidated statements of operations. Our business acquisitions may involve the potential payment of contingent consideration upon the achievement of certain performance thresholds.

The fair value of derivatives classified as Level 1 is based on the listed market price of such instruments. The fair value of derivatives classified as Level 2 is based on the values of the related underlying assets, indices or reference rates as follows: the fair value of forward foreign currency exchange rate contracts is a function of the spot rate and the interest rate differential of the two currencies from the trade date to settlement date; the fair value of total return swaps is based on the change in fair value of the related underlying equity security, financial instrument or index and a specified notional holding; the fair value of interest rate swaps is based on the interest rate yield curve; and the fair value of derivative liabilities related to LFI and other similar deferred compensation arrangements is based on the value of the underlying investments, adjusted for forfeitures. The fair value of derivatives classified as Level 3 is based on a Black-Scholes valuation model that utilizes both observable and unobservable inputs. Unobservable inputs include model adjustments for valuation uncertainty. See Note 8.

Investments Measured at Net Asset Value (“NAV”)—As a practical expedient, the Company uses NAV or its equivalent to measure the fair value of certain investments. NAV is primarily determined based on information provided by external fund administrators. The Company’s investments valued at NAV as a practical expedient in (i) alternative investment funds, debt funds and equity funds are redeemable in the near term, and (ii) private equity funds are not redeemable in the near term as a result of redemption restrictions.

The following tables present, as of December 31, 2023 and 2022, the classification of (i) investments and certain other assets and liabilities measured at fair value on a recurring basis within the fair value hierarchy and (ii) investments measured at NAV or its equivalent as a practical expedient:


	December 31, 2023
	Level 1		Level 2		Level 3		NAV		Total
Assets:
Investments:
Debt	$	4,285	$	–	$	–	$	–	$	4,285
Equities	54,224		–		493		–		54,717
Funds:
Alternative investments	15,676		–		–		46,004		61,680
Debt	180,907		10,413		–		5		191,325
Equity	343,094		–		–		45		343,139
Private equity	–		–		273		46,545		46,818
Derivatives	–		2,789		–		–		2,789
Total	$	598,186	$	13,202	$	766	$	92,599	$	704,753
Liabilities:
Securities sold, not yet purchased	$	4,809	$	–	$	–	$	–	$	4,809
Contingent consideration liability	–		–		6,583		–		6,583
Derivatives	–		368,673		–		–		368,673
Total	$	4,809	$	368,673	$	6,583	$	–	$	380,065


	December 31, 2022
	Level 1		Level 2		Level 3		NAV		Total
Assets:
Investments:
Equities	$	43,243	$	–	$	646	$	–	$	43,889
Funds:
Alternative investments	27,073		–		–		29,874		56,947
Debt	178,552		–		–		4		178,556
Equity	350,242		–		–		40		350,282
Private equity	–		–		18,772		35,050		53,822
Derivatives	–		14,554		–		–		14,554
Total	$	599,110	$	14,554	$	19,418	$	64,968	$	698,050
Liabilities:
Securities sold, not yet purchased	$	4,651	$	–	$	–	$	–	$	4,651
Derivatives	115		327,045		–		–		327,160
Total	$	4,766	$	327,045	$	–	$	–	$	331,811


	Year Ended December 31, 2023
	Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)		Purchases/ Acquisitions/ Issuances		Sales/ Settlements/ Transfers (b)		Foreign Currency Translation Adjustments		Ending Balance
Assets:
Investments:
Equities	$	646	$	54	$	–	$	(281)	$	74	$	493
Private equity funds	18,772		–		–		(18,508)		9		273
Total Level 3 assets	$	19,418	$	54	$	–	$	(18,789)	$	83	$	766

Liabilities:
Contingent consideration liability (c)	$	–	$	274	$	7,754	$	(1,445)	$	–	$	6,583
Total Level 3 liabilities	$	–	$	274	$	7,754	$	(1,445)	$	–	$	6,583


	Year Ended December 31, 2022
	Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)		Purchases/ Issuances		Sales/ Settlements		Foreign Currency Translation Adjustments		Ending Balance
Assets:
Investments:
Equities	$	578	$	99	$	–	$	–	$	(31)	$	646
Private equity funds	293		–		18,000		(13)		492		18,772
Total Level 3 assets	$	871	$	99	$	18,000	$	(13)	$	461	$	19,418


	Year Ended December 31, 2021
	Beginning Balance		Net Unrealized/ Realized Gains/Losses Included In Earnings (a)		Purchases/ Issuances		Sales/ Settlements/ Transfers (b)		Foreign Currency Translation Adjustments		Ending Balance
Assets:
Investments:
Equities	$	1,671	$	(796)	$	–	$	(235)	$	(62)	$	578
Private equity funds	1,486		951		–		(2,121)		(23)		293
Total Level 3 assets	$	3,157	$	155	$	–	$	(2,356)	$	(85)	$	871

Liabilities:
Derivatives	$	–	$	–	$	11,500	$	(11,500)	$	–	$	–
Total Level 3 liabilities	$	–	$	–	$	11,500	$	(11,500)	$	–	$	–

(a)Earnings recorded in “other revenue” for investments in Level 3 assets for the years ended December 31, 2023, 2022 and 2021 include net unrealized gains (losses) of $(6), $99 and $155, respectively. Unrealized losses of $274 were recorded in “amortization and other acquisition-related costs” for the contingent consideration liability for the year ended December 31, 2023.

(b)Transfers out of Level 3 private equity funds during the years ended December 31, 2023 and 2021 reflect investments valued at NAV as of December 31, 2023 and 2021. Transfers out of Level 3 derivatives during the year ended December 31, 2021 reflected transfers of derivative liabilities for LGAC Warrants to Level 1 principally due to a change in the inputs used to value these derivatives.

(c)For the year ended December 31, 2023, acquisitions represent the initial recognition of the contingent consideration liability (noncash transaction), and settlements represent aggregate cash and noncash settlement of contingent consideration after the acquisition date.

Financial Instruments Not Measured at Fair Value—The tables below present the carrying value, fair value and fair value hierarchy category of certain financial instruments as of December 31, 2023 and 2022 that are not measured at fair value in the Company’s consolidated statement of financial condition.


	December 31, 2023
			Fair Value Measurements Using:
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and cash equivalents	$	971,316	$	971,316	$	971,316	$	–	$	–
Deposits with banks and short-term investments	219,576		219,576		219,576		–		–
Restricted cash	34,091		34,091		34,091		–		–
Financing receivables	113,929		113,694		–		–		113,694
Customer loans	86,412		86,412		–		–		86,412
Other fees and customers and other receivables	561,978		561,978		561,978		–		–
Financial Liabilities:
Deposits and other customer payables	$	443,262	$	443,262	$	443,262	$	–	$	–
Senior debt	1,690,200		1,651,726		–		1,651,726		–


	December 31, 2022
	Carrying Value		Fair Value Measurements Using:
			Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and cash equivalents	$	1,234,773	$	1,234,773	$	1,234,773	$	–	$	–
Deposits with banks and short-term investments	779,246		779,246		779,246		–		–
Restricted cash	625,381		625,381		625,381		–		–
Financing receivables	97,964		98,362		–		–		98,362
Customer loans	128,890		128,890		–		–		128,890
Other fees and customers and other receivables	425,904		425,904		425,904		–		–
Financial Liabilities:
Deposits and other customer payables	$	921,834	$	921,834	$	921,834	$	–	$	–
Senior debt	1,687,714		1,601,917		–		1,601,917		–

Fair values of financing receivables were generally determined by discounting both principal and interest cash flows expected to be collected, using a discount rate approximating current market interest rates for comparable financial instruments and based on unobservable inputs.

December 31, 2023

Investments Redeemable

NAV

Unfunded

Commitments

% of

NAV

Not

Redeemable

Redemption

Frequency

Redemption

Notice Period

Alternative investment funds:

Hedge funds

45,324

–

(a)

30-60 days

Other

680

–

(b)

<30-30 days

Debt funds

–

(c)

<30 days

Equity funds

–

(d)

<30-60 days

Private equity funds:

Equity growth

46,545

5,505

(e)

100

(f)

Total

92,599

5,505

December 31, 2022

Investments Redeemable

NAV

Unfunded

Commitments

% of

NAV

Not

Redeemable

Redemption

Frequency

Redemption

Notice Period

Alternative investment funds:

Hedge funds

29,259

–

(a)

30-60 days

Other

615

–

(b)

<30-30 days

Debt funds

–

(c)

<30 days

Equity funds

–

(d)

<30-60 days

Private equity funds:

Equity growth

35,050

5,455

(e)

100

(f)

Total

64,968

5,455