Jefferies Financial Group is a diversified financial services company with operations across investment banking, capital markets, and asset and wealth management. Headquartered in New York City, Jefferies has a global footprint and serves customers in over 100 countries. In recent years, the firm has undergone a significant transformation under CEO Richard Handler to focus more on building recurring revenue streams and expanding into new business lines beyond investment banking.

Overview of Jefferies Financial Group

Jefferies Financial Group was originally founded as a small brokerage firm in the 1960s. However, over the past few decades, it has grown substantially through strategic acquisitions and organic growth. Today, the firm has over 4,000 employees and provides a wide range of products and services to corporations, financial sponsors, institutional investors, and high net worth individuals.

The firm operates through the following primary business lines and subsidiaries:

Jefferies LLC

Jefferies LLC is the firm’s global investment banking and capital markets business. This division provides clients with capital raising services, mergers and acquisitions (M&A) advisory, restructuring, and leveraged finance services. Jefferies is considered a mid-market investment bank and competes with firms like Lazard and Evercore. The investment banking division has deep sector expertise in areas like energy, real estate, healthcare, technology, and telecommunications.

Jefferies Group LLC

Jefferies Group LLC encompasses several trading platforms and businesses, including equities, fixed income, derivatives, and commodities trading. These trading desks provide sales, trading, and research services to institutional investor clients globally. The firm executes over $205 billion in daily trading volume across various asset classes.

Jefferies Finance LLC

Jefferies Finance LLC specializes in providing debt financing solutions. This includes leveraged loans, high yield bonds, distressed debt, and film/media finance. The leveraged finance team advises private equity firms and corporations on structuring credit facilities to support LBOs, refinancings, and recapitalizations.

Spectrum Asset Management

Spectrum is a London-based asset management platform acquired by Jefferies in 2010. Spectrum manages over $5 billion in assets across alternative investment strategies like hedge funds, private equity, real estate, and infrastructure.

Jefferies International Limited

Jefferies International Limited encompasses the firm’s international business operations, with offices across Europe, the Middle East, and Asia. The international division provides sales, trading, and investment banking services to clients globally.

Jefferies Mortgage Finance

Jefferies Mortgage Finance is a commercial mortgage banking and servicing business acquired in 2018. It provides financing for multifamily and commercial real estate properties.

Transformation and Growth Strategy Under CEO Rich Handler

When Rich Handler became CEO of Jefferies in 2001, it was operating primarily as a fixed income trading shop. Handler implemented a long-term growth strategy focused on building a full-service investment bank and diversifying the firm’s revenues beyond just trading.

Some of the key strategic initiatives under Handler’s leadership include:

  • Significantly expanding the investment banking business through hiring top talent in sectors like technology, healthcare, FIG, and real estate.
  • Acquiring boutique investment banks like Randall & Dewey and Hoare Govett to instantly gain domain expertise and talent.
  • Building a global equities platform to complement the fixed income trading business. Equities revenues now surpass fixed income trading revenues.
  • Forming a strategic alliance with mass-affluent wealth manager Leucadia National to expand into the asset management space. This paved the way for further acquisitions.
  • Purchasing merchant banking assets and middle market lending capabilities to expand Jefferies Finance as a major leverage finance player.
  • Acquiring mortgage banking firm HomeFed Corporation in 2014 to enter the commercial real estate finance sector.
  • Expanding internationally with offices across Europe, the Middle East, and Asia to provide services to clients globally.

This series of calculated strategic moves has allowed Jefferies to significantly diversify its business mix. In 2000, virtually 100% of net revenues came from fixed income trading. Currently, investment banking and equities trading each contribute around 30% of revenues. The remainder comes from asset management, leveraged finance, and merchant banking activities.

Handler has focused the firm more on serving corporate and institutional clients vs. trading for its own book. He has also nurtured the firm’s “entrepreneurial spirit” and collaborative culture. This has allowed Jefferies to attract top dealmakers and traders from major Wall Street banks. Handler himself maintains involvement across all aspects of the firm’s global strategy.

Investment Banking Division

Jefferies’ investment banking division provides critical advice and capital raising services for corporate clients. This includes underwriting debt and equity offerings, advising on mergers and acquisitions, and helping restructure distressed companies.

Jefferies investment banking operates primarily in the “middle market”, targeting smaller to mid-sized companies. It competes with other independent firms like Piper Jaffray, Moelis & Company, and Houlihan Lokey.

Some highlights of Jefferies’ investment banking practice:

  • Sector Expertise: Jefferies has built deep expertise across sectors like technology, healthcare, financial services, power and renewables, consumer, real estate, and energy. This allows bankers to provide informed, sector-specific advice.
  • M&A Advisory: Jefferies advises public and private companies on buy-side and sell-side M&A deals, takeover defense strategies, and spin-offs. Recent deals include advising International Flavors & Fragrances on its $26.2 billion merger with DuPont’s Nutrition business.
  • Equity Capital Markets: Jefferies helps companies raise equity capital through initial public offerings (IPOs), follow-on offerings, convertible offerings, SPACs, and rights offerings. Recent IPOs include leading Warby Parker and Olaplex public.
  • Debt Capital Markets: Companies leverage Jefferies’ expertise to raise capital through high yield bond offerings, leveraged loans, and investment grade corporate debt. Jefferies helped underwrite $40+ billion in HY bonds in 2021 alone.
  • Restructuring and Recapitalization: When companies face financial distress, the restructuring bankers help guide debt renegotiations, Chapter 11 filings, and balance sheet restructurings.

Jefferies’ sector-focused approach has allowed it to gain market share from larger banks on middle market deals. It ranked #1 in U.S. healthcare investment banking market share for deals under $1 billion in 2021. As the investment banking division continues to grow, Jefferies can provide end-to-end advice and financing services for clients throughout their lifecycle.

Equities and Fixed Income Trading

Alongside investment banking, Jefferies operates major equities and fixed income trading platforms to facilitate client trading and provide market liquidity.


Jefferies has transformed from primarily a fixed income trading shop into one of the largest equities trading and execution providers globally. Some details on the equities platform:

  • Provides trading services across equities, ETFs, futures, listed options, convertible bonds, and other equity derivatives.
  • Robust electronic trading capabilities along with high touch trading and execution.
  • Over 300 institutional sales and trading professionals covering thousands of institutional investor clients.
  • Expansive research coverage across market sectors and geographies from over 400 equity research analysts.
  • Prime brokerage services like custody, clearing, and financing for hedge fund clients.

Jefferies climbed the rankings to become one of the top equity trading counterparties globally. It now executes over 1.5 billion equity shares daily. Expansion into derivatives and electronic trading has also boosted equities results. The division generated record revenues over $2 billion in 2021.

Fixed Income

While equities represents an area of growth, fixed income trading remains a core area for Jefferies. Key facts:

  • Global trading across products like government bonds, investment grade and high yield corporates, mortgage-backed securities, municipal bonds, and derivatives.
  • Over 250 institutional sales and trading professionals in the Americas alone covering fixed income.
  • Top 10 municipal bond underwriter, senior housing lender, and non-bank mortgage originator in the U.S.

-Primary dealer and market maker for U.S. Treasuries and government agency securities like Fannie Mae and Freddie Mac.

  • Robust electronic trading across rates, credit, and securitized products.

Jefferies fixed income division generated sales and trading net revenues of over $1.5 billion in 2021. The firm is heavily involved in trading U.S. government bonds and related derivatives. It also maintains significant market share in mortgage-backed securities.

The equities and fixed income trading divisions combine to provide institutional clients with liquidity across asset classes and geographies. Jefferies’ trading expertise combined with sector-focused investment banking makes it a strategic partner for clients.

Jefferies International – Expanding the Global Footprint

As part of diversifying the business, Jefferies placed an emphasis on international expansion beginning in the 2000s. Today, Jefferies has operations across the Americas, Europe, the Middle East, Asia and Australia.

Some highlights of Jefferies International operations:

  • offices in over 30 locations from London to Hong Kong to São Paulo.
  • Over 2,000 employees across the international locations.
  • Provides sales, trading, research, and investment banking services tailored to regional clients.
  • Key regions include the UK, the rest of Europe, and Asia. Jefferies International executed over $125 billion in trading volume across global equities and fixed income in 2021.
  • Investment banking mandates across EMEA and Asia include IPOs, follow-on offerings, and M&A deals. Completed over 60 EMEA ECM transactions in 2021.

International expansion has opened up new revenue opportunities in trading and investment banking advisory services abroad. Jefferies also executes cross-border mandates leveraging expertise across regions. As a globally connected, mid-market investment bank, Jefferies differentiates from bulge bracket firms as well as local competitors.

Asset Management and Merchant Banking

Beyond its core investment banking and trading operations, Jefferies has also grown via acquisitions and organic growth across asset and wealth management and merchant banking.

Asset Management

Jefferies operates several asset management platforms:

  • Spectrum Asset Management: A London-based asset manager overseeing over $5 billion in alternative assets like hedge funds, private equity funds, and real estate funds.
  • Jefferies Investment Advisers: Manages public equities and fixed income strategies like the Jefferies SmartBeta funds.
  • Jefferies Finance: Manages structured credit funds focused on opportunities like aircraft leasing, product tankers, and mortgage credit.

These platforms expand Jefferies’ offerings to include portfolio management, hedge funds, and alternative investments alongside its traditional product suite. Assets under management across the platforms exceeds $15 billion.

Merchant Banking and Principal Investments

Jefferies Merchant Banking involves making principal investments in private companies, real estate assets, and other alternative investments alongside Jefferies Capital Partners. Some examples:

  • Invested as an anchor limited partner in technology-focused private equity funds like Thoma Bravo.
  • Acquired oil and gas assets like the Point Thomson Unit on the Alaska North Slope.
  • Formed a partnership with JPMorgan Chase to acquire mortgage servicing rights.
  • Invested in real estate assets like office buildings in London and Washington D.C.

These principal investments produce interest income, capital gains, and carried interest for Jefferies upon sale. The long-term investments further diversify Jefferies’ revenue streams beyond just transactional investment banking and trading fees.

Leveraged Finance – Jefferies Finance LLC

Jefferies significantly expanded its leveraged finance and debt capital markets capabilities with the creation of Jefferies Finance in 2004 and the later acquisition of Jefferies LoanCore in 2014.

Today, Jefferies Finance LLC specializes in providing secured leveraged finance for corporate clients. Key offerings:

  • Leveraged Loans: Jefferies advises private equity firms and corporate borrowers on structuring syndicated loans to finance LBOs, acquisitions, refinancings, and recapitalizations. Often serves as initial committed lender before syndicating out the loan.
  • High Yield Bonds: Underwrites and places senior secured high yield bond offerings for below investment grade corporate borrowers. Key sector focus areas include healthcare, energy, technology, media, and telecommunications.
  • Distressed Debt: When companies face financial distress, Jefferies Debt Capital Markets helps restructure existing debt through exchange offers, consent solicitations, and Chapter 11 process advisory.
  • Film Finance: Provides debt financing solutions for major film and entertainment companies. Recent deals include arranging $400 million in financing for Viacom.

With dedicated origination, capital markets, and restructuring professionals, Jefferies Finance has grown into a “top 10 leveraged finance house” according to Creditflux. It has been involved in financing over $85 billion of LBO and acquisition activity in the past decade. The leveraged finance capabilities complement the firm’s M&A, equities, and high yield expertise.

Case Study: Leucadia and Jefferies Partnership

A pivotal deal in Jefferies’ strategic shift into the asset management space was its 2013 strategic alliance with Leucadia National Corporation. Leucadia invested $2.8 billion into Jefferies and gained a major stake in the firm. In return, Jefferies acquired Leucadia’s asset management division along with its merchant banking and wealth management operations.

The highlights of the landmark deal include:

  • Jefferies gained Leucadia Asset management, including over $16 billion in assets under management across equities, fixed income, and alternative investments. This instantly boosted Jefferies’ asset management offerings.
  • Acquired Leucadia’s private equity arm, Leucadia Capital Partners, with $1.7 billion in committed capital. This expanded Jefferies’ merchant banking capabilities.
  • Integrated Leucadia Wealth Management’s high net worth investment services into Jefferies’ prime brokerage business.
  • The deal combined Leucadia’s asset management expertise with Jefferies’ investment banking and trading platforms. Jefferies could now provide end-to-end services to clients.
  • Leucadia became Jefferies’ largest shareholder, with the two companies benefiting from shared expertise and opportunities.

Since the landmark deal, Jefferies has continued acquiring boutique asset managers (like Spectrum AM) to build out a full wealth and asset management platform. The diversification beyond investment banking was critical in developing Jefferies into the multifaceted financial services firm it is today.

Recent Financial Performance and Outlook

Jefferies has produced steady revenue and profit growth in recent years as its diversification strategy bears fruit across market cycles:

  • Total Net Revenues have grown from $5.9 billion in 2017 to over $8.2 billion for the twelve months ending November 2021.
  • Pretax Income is up from $624 million in 2017 to nearly $2 billion over the same period.
  • Return on Tangible Equity was 23.2% for the twelve months through November 2021. This demonstrates the efficient use of shareholder capital.
  • As of November 30, 2021, Jefferies had a strong balance sheet with over $15 billion in assets and $7.4 billion in Level 3 capital.

While market volatility presents challenges, Jefferies is well-positioned across its diverse business lines spanning investment banking, equities, fixed income, asset management, and leveraged finance.

Key advantages include sector expertise, steady leadership under CEO Rich Handler, a global footprint, and both trading/advisory capabilities. Jefferies’ unique position as a “global boutique” firm should lead to continued growth and market share gains across strategic business verticals.


In summary, Jefferies Financial Group has undergone an impressive transformation over the past 20 years under CEO Rich Handler. It has diversified from primarily a fixed income trading shop into a multifaceted financial services firm. Alongside trading and investment banking, Jefferies now has significant capabilities across asset management, leveraged finance, merchant banking, and wealth management.

This mix of businesses gives Jefferies differentiated offerings and multiple revenue streams. It competes effectively with bulge bracket banks on mid-sized M&A deals and middle market capital raising due to sector expertise and attention. Meanwhile, the firm’s agility and strong trading platforms allow it to take share from local competitors abroad.

As Jefferies continues executing on its organic and inorganic growth strategy under Handler’s leadership, it is poised for continued success through global market cycles given its diversification. Jefferies Financial Group has cemented itself as a leading independent financial services firm.