Good morning. Today we reported a 15% increase in operating revenue for the first quarter with strong momentum in both financial advisory and asset management. In financial advisory, first quarter revenue of $317 million increased 8% from last year's period, reflecting broad-based activity across the business.
Our volume of publicly announced M&A transactions is up significantly from last year's first quarter, with particularly strong activity in the $1 billion to $10 billion range, as well as in Europe. The pace of new restructurings has moderated compared to last year, but we are experiencing increased activity in Europe as we expected.
Our capital advisory business continues to grow, both on a standalone basis, advising clients on capital structure, shareholder insights, ESG and capital raising, and as an important component of our M&A and strategic advisory work.
Our global private capital franchise continues to be in high demand, serving financial sponsors with new fundraising and innovative solutions in the expanding market for secondary transactions. In asset management, first quarter operating revenue of $328 million increased 22% from last year's period. This reflected management fees on a larger base of assets under management, as well as strong incentive fees, primarily from a European fixed income strategy and several alternative and local equity products.
As of March 31, we reported AUM at a record - at a quarter end record level of $265 billion, 37% higher than last year's period and 2% higher on a sequential basis. Average AUM for the first quarter also reached a record high of $261 billion, 18% higher than a year ago, and 6% higher on a sequential basis.
As of April 23, AUM increased to approximately $274 billion, driven primarily by market appreciation of $6.7 billion, positive foreign exchange movement of $2.7 billion and net outflows of $0.2 billion.
During the first quarter 1.7 billion in net outflows were driven primarily by the emerging markets and equity platform.
However, we achieved net inflows in a number of strategies, led by convertibles, international and global equities. Gross inflows in the first quarter continue to be strong across our platforms, rising for the fifth consecutive quarter.
Asset management has a healthy pipeline of unfunded mandates, with growing demand for global and international equities, as well as quantitative and alternative strategies.
We continue to invest for growth across the firm. In asset management, we are investing in areas where we see high growth potential, including strategies focused on sustainability and ESG, quantitative investing and alternative and thematic strategies.
We continue to launch funds and seed new strategies to meet investor demand.
We are executing on our strategy to expand our platforms with roll ups of investment teams. Yesterday, we announced an expansion of our alternatives platform with the addition of a long, short team focused on the technology, media and telecom sector. In financial advisory, we are focused on growth opportunities. We plan a significant number of senior hires this year, and we have been intensifying our coverage of private equity sponsors. Senior hires in our private capital and financial sponsor coverage teams in 2020 are already delivering increased contribution to our revenues in 2021. At the corporate level, in February, we launched Lazard Growth Acquisition Corp I, a SPAC that raised $575 million. We see significant opportunities in the stock market and are focusing on sectors where we have competitive industry expertise and strong networks.
Now turning to expenses. In the first quarter, we accrued compensation expense at a 59.5% adjusted compensation ratio compared to 60% in the first quarter of last year. Non-compensation expenses were 9% lower than the same period last year, reflecting continued lower travel and business development costs.
Our adjusted non-compensation ratio for the first quarter was 15.8% compared to 20% in the first quarter of last year.
Our effective tax rate in the first quarter as adjusted was 28.6%, in line with last year's first quarter.
We expect this year's annual effective tax rate to be in the mid 20% range.
We continue to generate strong cash flow, which supports return of capital to shareholders. In the first quarter, we returned $237 million, including $49 million in dividends, and $123 million in share repurchases.
During the first quarter, we bought back 2.9 million shares of our common stock at an average price of $42.30 per share. These repurchases effectively offset potential dilution from our 2020 year-end equity grants. Yesterday, we declare a quarterly dividend on our common stock of $0.47 per share. And going forward, we expect to use excess cash flow toward increased share repurchases. Yesterday, our Board of Directors authorized a $300 million increase in our share repurchase authorization.
Our total outstanding share repurchase and authorization is now $439 million. To summarize, our quarterly results underscore the strength and stability of our model and the continued high performance of our businesses. Ken will now provide perspective on our outlook.