Jefferies Financial Group Inc. (Jefferies) is a global full-service investment banking and capital markets company.
The company’s largest subsidiary is Jefferies LLC, a U.S. broker-dealer. The company’s first international operating subsidiary is Jefferies International Limited, a U.K. broker-dealer.
The company’s strategy focuses on driving momentum in its full-service investment banking business, bringing value to clients and executing in its capital markets sales and trading businesses and...
Jefferies Financial Group Inc. (Jefferies) is a global full-service investment banking and capital markets company.
The company’s largest subsidiary is Jefferies LLC, a U.S. broker-dealer. The company’s first international operating subsidiary is Jefferies International Limited, a U.K. broker-dealer.
The company’s strategy focuses on driving momentum in its full-service investment banking business, bringing value to clients and executing in its capital markets sales and trading businesses and growing its Leucadia Asset Management alternative asset management platform. The company is always client focused first and committed to integration and collaboration across its businesses.
Business Segments
The company reports its activities in two business segments: (1) Investment Banking and Capital Markets and (2) Asset Management.
Investment Banking and Capital Markets
This segment provides investment banking, capital markets and other related services to the company’s clients. The company provides underwriting and financial advisory services across a range of industry sectors in the Americas; Europe and the Middle East; and the Asia-Pacific. The company’s capital markets businesses operate across the spectrum of equities and fixed income products. Related services include prime brokerage, equity finance, and research and strategy. Investment Banking and Capital Markets also includes the company’s corporate lending joint venture (‘JFIN Parent LLC’ or ‘Jefferies Finance’) and the company’s commercial real estate finance joint venture (‘Berkadia Commercial Holding LLC’ or ‘Berkadia’).
Asset Management
This segment provides alternative investment management services to investors globally. Through the company’s asset management efforts, the company often seeds or provides additional strategic capital in the strategies offered by affiliated asset managers in addition to investing for the company’s own account. The company’s Asset Management business also holds investments in public securities and private companies, along with investments in several consolidated subsidiaries whose operations consist of, among other businesses, real estate development, online foreign exchange trading and telecommunications. These investments and holdings include the remainder of the company’s legacy merchant banking portfolio, as well as other investments.
Businesses
Investment Banking and Capital Markets
The company’s Investment Banking and Capital Markets segment focuses on Investment Banking, Equities and Fixed Income. The company primarily serves public companies, private companies, and their sponsors and owners, institutional investors and government entities. The company’s services are enhanced by its relentless client focus, the company’s differentiated insights and a flat and nimble operating structure.
Investment Banking
The company provides its clients around the world with a full range of financial advisory, equity underwriting and debt underwriting services. The company’s investment banking professionals operate in the Americas, Europe and the Middle East and Asia-Pacific, and are organized into industry, product and geographic coverage groups. The company’s industry coverage groups include: Consumer; Energy and Power; Financial Institutions; Financial Sponsors; Healthcare; Industrials; Municipal Finance; Real Estate, Gaming and Lodging; and Technology, Media and Telecom. The company’s product groups include advisory (which includes mergers and acquisitions, sponsor coverage, private capital and restructuring and recapitalization expertise), equity underwriting and debt underwriting. The company’s teams are based in major cities in the United States, as well as London, Hong Kong, Amsterdam, Dubai, Frankfurt, Madrid, Melbourne, Milan, Mumbai, Paris, São Paulo, Singapore, Stockholm, Sydney, Tel Aviv, Tokyo, Seoul, Calgary and Toronto. The company has continued to invest in its investment banking business, significantly expanding its professional talent base again since 2021 and increasing the company’s presence globally.
Advisory Services
The company provides mergers and acquisition, debt advisory and restructuring and private capital advisory services to companies, financial sponsors and government entities. In the mergers and acquisitions area, the company advises business owners, private equity firms and public and private corporations on mergers, sales, acquisitions, divestitures, leveraged buyouts, cross-border transactions, joint ventures, spin-offs and other corporate restructurings. In the debt advisory and restructuring area, the company provides companies, bondholders, creditors and lenders a full range of both in-court and out-of-court advisory capabilities to help the company’s clients enhance their financial position by obtaining the best available capital and by executing complex restructuring transactions. As part of the company’s private capital advisory business, the company advises financial sponsors and their investors on the creation and structuring of funds and fund offerings and primary and secondary capital raising. The company also advises large institutional investors on the sale of private equity limited partnership and co-investment interests.
Equity Underwriting
The company provides a broad range of equity financing capabilities and equity capital solutions to businesses and their owners. These capabilities include initial public offerings, follow-on offerings, rights-offerings, at the market offerings, block trades, private placements and equity-linked products.
Debt Underwriting
The company provides a wide range of debt capital raising and acquisition financing capabilities to businesses, financial sponsors and government entities. The company helps clients raise capital, carry out refinancings, issue bonds, and access alternative and structured finance solutions that optimize terms and minimize risk. These offerings include both public and private debt, such as investment grade debt, high yield bonds, leveraged loans, municipal debt, emerging market debt, global structured notes, preferred stock and mortgage-backed and other asset-backed securities.
Other Investment Banking Activities
Jefferies Finance LLC (Jefferies Finance), the company’s 50/50 joint venture with Massachusetts Mutual Life Insurance Company, structures, underwrites and syndicates primarily senior secured loans to corporate borrowers; and manages proprietary and third-party investments for both broadly syndicated and direct lending loans. Jefferies Finance conducts its operations primarily through two business lines, Leveraged Finance Arrangement and Asset Management. In connection with its Leveraged Finance business, loans are originated primarily through the company’s investment banking efforts and Jefferies Finance typically syndicates to third-party investors substantially all of its arranged volume. The Asset Management business of Jefferies Finance, referred to as Jefferies Credit Partners, is a multi-strategy credit platform that manages proprietary and third-party capital invested across commingled funds, funds-of-one, separately managed accounts, business development companies, collateralized loan obligations and levered balance sheet funds. Broadly syndicated loan investments are sourced through transactions arranged by Jefferies Finance and third-party arrangers and managed through its subsidiary, Apex Credit Partners LLC. Direct lending investments are primarily sourced through Jefferies. Jefferies Finance and its subsidiaries that are involved in investment management are registered investment advisers with the SEC.
Berkadia Commercial Mortgage Holding LLC is the company’s commercial real estate finance and investment sales joint venture with Berkshire Hathaway, Inc. Berkadia originates commercial and multifamily real estate loans that are sold to U.S. government agencies or other investors with Berkadia retaining the mortgage servicing rights. In addition, Berkadia originates loans for its own balance sheet. These loans provide interim financing to borrowers who intend to refinance the loan with longer-term loans from an eligible government agency or other third-party. Berkadia is also a servicer of commercial real estate loans in the U.S. performing primary, master and special servicing functions for the U.S. government agency programs and financial services companies. In addition, Berkadia provides brokerage services, asset review, market research, financial analysis and due diligence support for multifamily real estate projects.
Strategic Alliance with SMBC Group
In July 2021, the company entered into a strategic alliance with Sumitomo Mitsui Financial Group, Inc. (‘SMFG’), Sumitomo Mitsui Banking Corporation (‘SMBC’) and SMBC Nikko Securities Inc. (together referred to as ‘SMBC Group’) to collaborate on corporate and investment banking business opportunities, with an initial focus on leveraged finance and cross-border mergers and acquisitions involving Japanese companies. In April 2023, the company agreed with SMBC a significant expansion of this alliance. This relationship provides the company with enhanced client capabilities and supports the continued growth of the company’s global investment banking and capital markets business. Under its alliance, the company, among other things, coordinates efforts in leveraged finance to expand and scale existing offerings, seek cross-border mergers and acquisition advisory opportunities involving Japanese companies, and jointly pursue investment banking, capital markets and financing opportunities by leveraging the company’s shared strengths and relationships. At November 30, 2024, SMBC owned 15.8% of the company’s common stock on an as-converted basis and 14.5% on a fully-diluted, as-converted, basis.
Equities
Equities Research, Capital Markets
The company provides its clients leading advisory, differentiated distribution and solution-based execution capabilities through equities research and sales and trading across global equities markets. These services are delivered with key capabilities in cash equities, electronic trading, equity derivatives, convertibles, corporate access and prime services. The company delivers high touch services and act as agent, principal or market maker to provide clients with execution quality in varying liquidity situations—providing clients with bespoke insights and execution informed by the company’s sector expertise. The company’s equities electronic trading business provides its clients with local expertise and innovative electronic trading solutions, including customizable algorithms. The company brings a full-service coverage model and customized solutions in equity derivatives and financing solutions and the company’s convertibles platform is a market leading franchise.
Commissions or spread revenue is earned by executing, settling and clearing transactions for clients across these markets in equity and equity-related products, including common stock, American depository receipts, global depository receipts, exchange-traded funds, exchange-traded and over-the-counter (‘OTC’) equity derivatives, convertible and other equity-linked products and closed-end funds. The company’s equity research, sales and trading efforts are organized across the Americas, Europe and the Middle East and the Asia-Pacific; and the company continues to strengthen its global footprint throughout these regions. The company’s clients are primarily institutional market participants, such as mutual funds, hedge funds, investment advisors, pension and profit sharing plans, and insurance companies. Through the company’s global research team and sales force, the company maintains relationships with its clients, distributes investment research and insights, trading ideas, market information and analyses across a range of industries and receive and execute client orders.
Prime Services
The company’s Prime Services business provides a full-service offering that includes financing, business consulting and capital introduction services, a robust technology platform, outsourced trading solutions for both start-up and existing managers, strategic content and thought leadership. The company’s prime brokerage services in the U.S. provide hedge funds, money managers and registered investment advisors with execution, financing, clearing, financing, swaps, outsourced trading and reporting and administrative services. The company’s platform is fully self-clearing and provides global access to markets across the world. The company finances its clients’ securities positions through margin loans that are collateralized by securities, cash or other acceptable liquid collateral. The company earns an interest spread equal to the difference between the amount the company pays for funds and the amount the company receives from its clients. The company also operates a matched book in equity and corporate bond securities, whereby the company borrows and lends securities versus cash or liquid collateral and earn a net interest spread.
Wealth Management
The company provides tailored wealth management services designed to meet the needs of high net worth individuals, their families and their businesses, private equity and venture funds and small institutions.
Fixed Income
Jefferies’ facilitates client activity by making markets in a wide range of fixed income securities, loans and derivative instruments to a large and diversified group of clients, including financial institutions and corporates. The company offers clients real-time actionable insights and differentiated high and low touch execution, as well as a range of financing solutions tailored to the company’s clients’ needs.
The company’s global capabilities across sales, trading and capital markets cover credit products, including loans, high yield and distressed debt securities, investment grade securities, municipal securities, structured finance transactions and trade and litigation claims. The company’s emerging markets sales and trading team actively participates in sovereign and corporate fixed income markets in Latin America, Eastern Europe, the Middle East, Africa and Asia. The company’s global structured solutions business provides customized products in interest rates and foreign exchange to investors, as well as providing interest rate and foreign currency hedging solutions to corporates. The company’s securitized markets group trades, structures and provides warehousing solutions for collateralized loan obligations (CLOs) and asset-backed securities covering prime and non-conforming residential mortgage-backed securities, the U.S. agency residential mortgage-backed securities and consumer, as well as other non-traditional collateral. The company’s interest rate product capabilities cover government bonds, other government-backed securities and cleared interest rate swaps. Jefferies is designated as a Primary Dealer for the U.S. government securities and is designated in similar capacities for several European countries. Additionally, through the use of repurchase agreements, the company acts as an intermediary between borrowers and lenders of short-term funds and obtain funding for various of the company’s inventory positions. The company’s strategists and economists provide ongoing commentary and analysis of the global fixed income markets and provide ideas and analysis to clients across the company’s breadth of fixed income products.
Alternative Asset Management
Under the Leucadia Asset Management (‘LAM’) umbrella, the company manages and provides services to a diverse group of alternative asset management platforms across a spectrum of investment strategies and asset classes. LAM offers institutional clients an innovative range of investment strategies through its directly owned and affiliated managers and offers investors opportunities to invest alongside the company. The company’s products are offered to pension funds, insurance companies, sovereign wealth funds, and other institutional investors globally. The investment products under LAM range from multi-manager products to niche equity long/short strategies to credit strategies, among other strategies. The company offers its affiliated asset managers access to stable long-term capital, robust operational infrastructure and global marketing and distribution. The company often invests seed or additional strategic capital for its own account in the strategies offered by the company and associated third-party asset managers in which the company has an interest. The company continues to expand its asset management efforts and establish further strategic relationships to expand the company’s offerings.
Other Investments
The company’s legacy merchant banking portfolio, managed by the co-heads of Asset Management, includes Stratos Group International, LLC (‘Stratos’) (formerly FXCM Group, LLC, or ‘FXCM’), provider of online foreign exchange trading services; Tessellis S.p.A. (‘Tessellis’), a telecommunications company publicly listed on the Italian stock exchange; HomeFed LLC (‘HomeFed’), (real estate); investments in certain public equity securities; and other investments in private companies and asset management funds.
Regulation
As a publicly traded company and through the company’s investment bank, investment management and derivative businesses in the U.S., the company is subject to the jurisdiction of the Securities and Exchange Commission (‘SEC’).
In addition, the Financial Industry Regulatory Authority, Inc. (‘FINRA’) and the National Futures Association (‘NFA’) are self-regulatory organizations (‘SROs’) that are actively involved in the regulation of the company’s financial services businesses (securities businesses in the case of FINRA and commodities/futures businesses in the case of the NFA).
The designated examining authority under the U.S. Securities Exchange Act of 1934, as amended (the ‘Exchange Act’) for Jefferies LLC’s activities as a broker-dealer is FINRA, and the designated self-regulatory organization (‘DSRO’) under the U.S. Commodity Exchange Act for Jefferies LLC’s non-clearing FCM activities is the NFA. As it pertains to Jefferies Financial Services Inc. (‘JFSI’), the designated examining authority for its activities as an SEC registered SBS dealer and OTCDD is the SEC, while the DSRO for its activities as a swap dealer registered with the CFTC is the NFA.
Pursuant to systemic risk reporting requirements adopted by the SEC, Jefferies’ affiliated registered investment advisers with private investment fund clients are required to report certain information about their investment funds to the SEC.
The company’s international subsidiaries are subject to extensive regulations proposed, promulgated and enforced by, among other regulatory bodies, the European Commission and European Supervisory Authorities (including the European Banking Authority and European Securities and Market Authority), the U.K. Financial Conduct Authority, the German Federal Financial Supervisory Authority (‘BaFin’), the Canadian Investment Regulatory Organization, the Swiss Financial Market Supervisory Authority (‘FINMA’), the Dubai Financial Services Authority, the Hong Kong Securities and Futures Commission, the Japan Financial Services Agency, the Monetary Authority of Singapore, the Australian Securities and Investments Commission and the Securities and Exchange Board of India (‘SEBI’).
History
The company was founded in 1962. It was incorporated in 1968. The company was formerly known as Leucadia National Corporation and changed its name to Jefferies Financial Group Inc. in 2018.
The Analyst Price Target shows the analysts’ low, high, and average target at a glance.
