NEW YORK (Bloomberg) — Bermudian-domiciled Lazard Ltd, the largest independent investment bank, said first-quarter profit rose 19 per cent, missing analysts’ estimates as revenue from asset management and advising on mergers declined.

Net income climbed to $66.8 million, or 50 cents a share, from $56 million, or 42 cents, a year earlier, the firm said yesterday in a statement. That missed the 65-cent average estimate of nine analysts surveyed by Bloomberg. Revenue declined 14 per cent to $498.2 million and expenses dropped 21 per cent to $399.8 million.

Lazard derives about half its revenue from advising on deals and the rest from asset management. Merger-advisory companies have slipped this year on concern market volatility will cause executives to hesitate in pursuing deals. The financial-advisory business, which includes transactions advice, fell 12 per cent to $266 million, while restructuring fees rose after a plunge in fuel prices hurt revenue at energy firms.

“This was a really tough quarter for markets, and I think we did well,” chief executive officer Ken Jacobs said in a telephone interview. He said the firm is advising on a record number of deals, and most will close in the second half of the year. “Confidence always gets shaken by periods of volatility, so it’s going to take a little bit of time to get back to where it was last year.”

Lazard shares dropped 2.2 per cent in early afternoon trading, extending its decline for the year to 14 per cent. That compares with a 2.7 per cent climb in the Standard & Poor’s 500 Index for 2016.

Asset-management revenue dropped 12 per cent to $240 million, and assets under management totalled $191 billion as of the end of March, down 4 per cent from a year earlier. About a fifth of the business focuses on emerging-market equities, which have been improving this year.

“On the asset-management side of the business I think we’ve seen a pretty impressive rebound so far,” Jacobs said. “We had very mild outflows for the quarter of about $300 million or so, which again, given the volatility, is really quite good. Gross inflows, about record level, which signals the health of the business as a whole.”

Lazard’s expenses tied to compensation and benefits slipped 10 per cent to $297.2 million. Jacobs said the full-year awarded pay ratios will be similar to last year, though the firm will take a “careful look.” He said he expects dealmaking to rebound because companies are still finding the need to fight disinflation and deflationary pressure on profits.

“M&A cycles never move in a straight line, there are ups and downs,” Jacobs said. “It’s not surprising to see a fall-off right now, but it kind of feels like to us it still has a ways to run.”