Jefferies Group
| Company type | Limited liability company |
|---|---|
| Industry | Investment banking, financial services |
| Founded | 1962 |
| Founder | Boyd Jefferies |
| Headquarters | New York City , United States |
Area served | Global |
Key people | Richard B. Handler (Chairman and CEO), Brian Friedman (Executive Committee Chair) |
| Products | Capital markets, financial advisory, institutional brokerage, securities research, asset management, mergers and acquisitions, restructuring, financial consulting |
| Parent | Jefferies Financial Group |
Jefferies Group LLC is a U.S.-based global independent investment bank and financial services firm headquartered in New York City. The company provides a range of services including capital markets and financial advisory, institutional brokerage, securities research, and asset management. Its offerings extend to mergers and acquisitions, restructuring, and various other financial consulting solutions. The Capital Markets division covers securities trading—featuring its partly owned subsidiary Jefferies High Yield Trading, LLC—as well as investment banking operations.
On November 12, 2012, Jefferies revealed plans to merge with its largest shareholder, Leucadia National Corporation. At that time, Leucadia's stock was priced at $21.14 per share; by December 31, 2015, the price had declined to $17.39. Jefferies continues to be the primary operating entity within the Jefferies Financial Group, which is the new designation for Leucadia since May 2018.
After the merger was finalized on March 1, 2013, Jefferies & Company, Inc. transitioned into a limited liability company and adopted the name Jefferies LLC. This entity functions as a subsidiary under Jefferies Group LLC, itself part of Jefferies Financial Group.
1962–1987
Boyd Jefferies established the firm in 1962, starting with $30,000 borrowed funds to acquire a seat on the Pacific Coast Stock Exchange. The company was an innovator of the "third market," which allowed over-the-counter trading of listed stocks directly between institutional investors, enhancing both liquidity and confidentiality. By 1965, Jefferies had expanded its presence to include the Detroit, Midwest, Boston, and Philadelphia stock exchanges. Two years later, in 1967, it gained membership on the New York Stock Exchange (NYSE) and opened an office in New York City. This expansion helped Jefferies become the seventh-largest firm trading on the NYSE during that era.
In 1969, Minneapolis-based Investors Diversified Services (IDS), then ranked as the second-largest financial services company in the U.S., acquired Jefferies to strengthen its institutional business with additional capital resources. However, due to IDS’s limited broker-dealer revenue, Jefferies was compelled to withdraw from the NYSE under Exchange Rule 318. Subsequently, IDS and Jefferies filed an antitrust lawsuit against the NYSE in 1971, accusing it of monopolistic behavior that disadvantaged them. By 1973, the NYSE revised its policies to permit membership for firms owned by diversified companies provided most brokerage activity was directed at retail clients, allowing Jefferies to rejoin.
Following a challenging period under IDS ownership, Boyd Jefferies repurchased the firm in September 1973. By 1977, offices were established in Los Angeles, New York, Chicago, Dallas, Boston, and Atlanta. The company went public on October 13, 1983, offering 1.75 million shares priced at $13 each. By 1984, it ranked among the top ten most profitable publicly traded brokerage firms. International expansion included launching a London office under Frank Baxter’s leadership; he became president and COO in 1986.
In 1987, Boyd Jefferies faced charges from government authorities and the SEC related to securities violations involving customer stock "parking" and margin infractions associated with Ivan Boesky. He pleaded guilty and received a fine along with a five-year industry ban; while the brokerage unit was censured, no charges were brought against the company itself. That same year, Boyd Jefferies stepped down from his role.
1988–1999
Frank Baxter assumed the role of CEO in 1987, guiding Jefferies toward broadening its focus beyond its original market specialization. By 1990, roughly 80% of the firm's income was derived from equity block trading. Following the downfall of Drexel Burnham Lambert in 1990, Jefferies expanded its team by recruiting 60 bankers and traders, among them current chairman and CEO Richard B. Handler, which marked the firm’s entry into the high-yield debt and investment banking arenas. In 1993, Jefferies initiated its first sector-specific investment banking efforts by acquiring a team from Howard Weil that concentrated on oil and gas. The following year, it purchased a 25% interest in BBY, an Australian stockbroking company.
Baxter also championed international growth in electronic trading, corporate finance, as well as convertible and derivative sales. Jefferies ventured into the fourth market—off-exchange electronic trading—via its subsidiary Investment Technology Group (ITG), founded in 1987 to operate POSIT, an automated trading platform. ITG was publicly spun off in 1999.
2000–2010
Frank Baxter stepped down as CEO in 2000, with Richard Handler taking over as chairman and CEO in 2001, alongside John Shaw as president and COO. Their objective was to develop a fully integrated investment bank that included merchant banking capabilities, aiming to diversify revenue streams through expansion in asset management and investment banking. In September 2001, the company relocated its headquarters from Los Angeles to New York.
Jefferies grew through acquiring boutique advisory firms possessing sector-specific expertise, such as Randall & Dewey (energy), Broadview (technology), Quarterdeck Investment Partners (aerospace and defense), Helix (private equity placement), LongAcre Partners (media), Putnam Lovell (financial services), Depfa First Albany Securities (municipal securities), Bache & Co. (foreign exchange, commodities, options), and Hoare Govett (corporate broking).
Taking advantage of market disruptions caused by the 2008 credit crisis, Jefferies entered the mortgage-backed securities and municipal bond markets. By June 2009, it was designated one of 17 primary dealers by the New York Federal Reserve, enhancing its market presence amid industry consolidation.
From 2009 onwards, Jefferies expanded its European footprint: its London-based Rates division joined Germany’s Bund bidding consortium; it became a Gilt-Edged Market Maker for UK government bonds; was appointed as a Dutch Primary Dealer; and earned primary market operator status in Portugal—thereby strengthening its influence across European sovereign bond markets.
In June 2009, Jefferies bolstered its healthcare investment banking team by acquiring more than 35 bankers from UBS’s profitable healthcare group led by Benjamin Lorello. This move solidified Jefferies’ status as the leading bookrunner for healthcare follow-on equity offerings and top advisor for healthcare mergers and acquisitions, significantly increasing both revenue and market share within its investment banking segment.
2010 onward
In November 2011, Jefferies encountered allegations from Egan-Jones claiming that 77% of its shareholder equity was invested in illiquid sovereign debt associated with the MF Global collapse. This accusation sparked a short-selling assault and misinformation campaign. CEO Richard Handler and senior management responded promptly by reducing approximately three-quarters of the position to highlight liquidity and hedging strategies, shrinking the balance sheet accordingly, and publicly rebutting false assertions. This approach resulted in a full recovery of the share price from November lows. Leucadia, holding a 29% stake, lauded this episode as Jefferies’ "finest hour."
On April 16, 2012, Handler together with Executive Committee Chair Brian Friedman formed the Jefferies Global Senior Advisory Board, comprising distinguished business figures including James D. Robinson III and Sir David Reid.
After Knight Capital suffered a $440 million trading loss in August 2012, Jefferies led a $400 million rescue financing round by investing $125 million itself and becoming Knight’s largest shareholder. This crucial transaction was orchestrated by Handler and Friedman.
On November 12, 2012, Jefferies merged with Leucadia National Corporation—its largest shareholder at approximately 28%. Valued at $3.8 billion, the combined entity held $9.4 billion in shareholder equity along with over $5 billion in cash and $4 billion in net operating loss tax credits. Post-merger, Jefferies continued operating independently as Leucadia’s largest operating subsidiary. Handler assumed CEO responsibilities for both companies while Friedman became president of Leucadia.
In September 2014, Jefferies committed $500 million to CircleBack Lending, utilizing its expertise in securitization to structure asset-backed securities targeting investor markets. The initial securitization under this arrangement closed in June 2015 at $106 million.
Jefferies’ third-quarter financial report for 2019 revealed declines in net revenue and income partly due to a $146 million non-cash charge reflecting a decrease in fair value of its holdings in We Company.
On December 9, 2019, the SEC imposed nearly $4 million in fines on Jefferies for improper handling of American Depositary Receipts (ADRs).
On April 5, 2021, Jefferies managed GameStop’s market offering aimed at raising up to $1 billion through issuing as many as 3.5 million new common shares following an SEC filing.
Operations
Jefferies serves a wide array of sectors such as Aerospace & Defense, Business Services, CleanTech, Consumer & Retail, Energy, Financial Institutions Group, Financial Sponsors, Gaming & Leisure, Healthcare, Industrials, Maritime, Media, Public Finance, Real Estate & Lodging, Technology, and Telecommunications.
The company delivers fundamental research and facilitates trade execution for equity, equity-linked, and fixed income instruments. These include corporate bonds, U.S. government and agency securities, repo financing, mortgage- and asset-backed securities, municipal bonds, whole loans, and emerging market debt. Furthermore, Jefferies engages in commodities and derivatives trading and offers asset management solutions tailored to institutional investors.
With its main headquarters in New York City and regional hubs in London for Europe and Hong Kong for Asia, Jefferies operates from more than 30 offices worldwide. Important centers such as Boston, Charlotte, Los Angeles, San Francisco, Chicago, Frankfurt, Zürich, Amsterdam, Singapore, Shanghai, Tokyo, and Mumbai bolster its extensive global presence and operational capabilities.