Annualized Returns
Name 3-Month YTD 1-Year 3-Year 5-Year 10-Year Since Inception (%; Gross of fees) (01/01/2000) Lazard U.S. Equity Growth - SMA 1.8 -10.0 -4.6 7.3 8.6 N/A 2.2 (%; Net of fees) Lazard U.S. Equity Growth - SMA 1.0 -11.4 -7.4 4.1 5.4 N/A -0.8 Russell 1000 Growth Index 1.2 -9.1 -6.0 5.9 7.3 N/A -3.8
Performance is presented gross and net of all fees. Net of fees performance has been calculated using a 3.0% fee assumption. Gross of fee performance is presented as supplementary information, as performance excludes transaction costs. Please refer to the disclosures for important additional details of this composite. The performance quoted represents past performance. Past performance does not guarantee future results.

The equity markets were feeling the pain of the U.S. economic downturn during the second quarter. The combination of higher commodity and energy prices, continued pressure on the financial system due to the subprime debacle, and the credit crunch had implications for many areas of the market.

An overweight exposure to, and stock selection in, the materials, energy and information technology sectors added to performance. Our underweight exposure to the financials sector also benefited performance, but our stock selection within the sector performed poorly. In addition, our health care names underperformed, despite our correctly underweight exposure to the sector. Our overweight position and stock selection in the consumer discretionary sector also hurt performance. Finally, not having any representation in the utilities and telecom services sectors detracted from performance during the quarter as well.

The equity market is a leading indicator for general economic conditions, and therefore we continue to look for opportunities that can demonstrate our desired growth characteristics in the next 12 months.

		Lazard			Russell 1000 Growth Index
Number of Securities		68			649
Current Dividend Yield (%)		0.9			1.2
Average Weighted Market Cap ($ billions)		63.8			65.4
Turnover - Trailing 12 Months (%)		83.9			N/A

Characteristics

1. The allocations and specific securities mentioned are derived from a representative portfolio which represents the proposed investment for a fully discretionary account. Allocations and security selection are subject to change. The information provided should not be considered a recommendation or solicitation to purchase or sell any particular security. There is no assurance that any securities referenced herein will remain in the account’s portfolio or that securities sold have not been repurchased. The securities discussed may not represent the account’s entire portfolio. It should not be assumed that any of the referenced securities were, or will prove to be profitable, or that the investment decisions we make in the future will be profitable.
2. The allocations mentioned are based upon a representative portfolio which represents the proposed investment for a fully discretionary account. Allocations are subject to change.
3. Portfolio characteristics are based upon a representative portfolio which represents the proposed investment for a fully discretionary account. Source: Lazard, FactSet.

The composite represents the returns of all fully discretionary, fee-paying, portfolios with a U.S. Large Capitalization Equity Growth investment mandate and a minimum of $200,000 in assets under management.

Lazard's account inclusion policy is the first full month or the end of the month in which the account is fully invested. Performance for the period prior to February 15, 2005 represents the AIMR compliant composite of Knelman Asset Management Group, LLC ("KAMG"). On February 15, 2005, Lazard acquired substantially all the assets of KAMG. The returns of the individual portfolios within the composite are time-weighted, use trade date accounting, are based upon monthly portfolio valuations, and include the reinvestment of all earnings as of the payment date. The composite returns are asset-weighted based upon beginning period market value. Additional information regarding policies for calculating and reporting returns is available upon request. Composite returns are shown before tax and the deduction of custody fees. The composite returns presented represent past performance and do not indicate future results, which may vary.

Lazard's standard fee schedule for U.S. Equity Growth accounts is 0.75% of the first $100 million of assets and 0.50% on the balance. The highest standard fee has been used in order to create a composite net of fee history through December 31, 2004. (This fee schedule may be presented in non-U.S. local currency equivalents based on prevailing exchange rates.) A complete list and description of all Lazard composites is available upon request.

The Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The index is market cap-weighted and includes only common stocks incorporated in the United States and its territories. The Russell 1000 Growth Index is a subset of the Russell 3000® Index, which represents approximately 98% of the investable U.S. Equity market.

Lazard has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS). Lazard Asset Management is the "Firm" to which the GIPS Standards apply (Frankfurt office included in Firm definition as of January 1, 2003, and assets acquired from Knelman Asset Management Group, LLC as of February 15, 2005). The Firm has been audited by an independent accounting firm through December 31, 2007 and the GIPS verification letter is available upon request. The composite creation date is February 2005.