Sept 12 (Reuters) - Lazard's ( LAZ ) asset management

business saw net outflows of $7.5 billion in August after one of

its clients switched to a passive investing strategy, a person

familiar with the matter told Reuters on Thursday.

The bank was one of several asset managers to be impacted

after the client restructured its developed market assets

portfolio, the person said, without naming the client.

Passive investing typically refers to a buy-and-hold

portfolio strategy that involves minimal trading in the market

and mostly centers around investing in index-tracking funds.

Lazard's ( LAZ ) total assets under management (AUM) fell

sequentially to about $244.34 billion at August-end from $246.10

billion in July. Its AUM at August-end included $2.8 billion in

gains from equities and $3 billion from foreign exchange.

However, its AUM was up from the year-earlier period.

Outside of the client, flows for the month were generally in

line with the bank's expectations and there was growing new

business activity, the source said.

Although August was a volatile month for the U.S. equity

market, the S&P 500 is still up about 16% so far this year,

marked by gains across big-tech stocks, particularly those

focused on artificial intelligence.

Lazard ( LAZ ) swung to a profit in the second quarter and beat

analysts' expectations as dealmaking surged. Like its industry

peers, the investment bank has benefited from renewed activity

in the M&A market and as companies raise money from stock and

debt offerings.

The bank's asset management as well as its restructuring and

liability management practice businesses had helped sustain

revenue for roughly two years as dealmaking activity stalled.

In the second quarter, asset management revenue at Lazard ( LAZ )

fell 1%, on an adjusted basis, to $265 million.

(Reporting by Manya Saini and Pritam Biswas in Bengaluru;

Editing by Anil D'Silva)