45 Years And There Is Only One Joe Steinberg

Joe Steinberg

Without Joe Steinberg, Jefferies would be a mere shadow of itself today.  Forty-five years ago today, Joe and his equally legendary partner, Ian Cumming (whom we miss tremendously), convinced Talcott National’s creditor banks to approve a restructuring, and Joe and Ian took over the company.  Talcott National was the pre-pre-cursor to today’s Jefferies.  The strategy was simple.  Find undervalued assets that were complicated and messy, acquire them, and optimize value as principals.  In 1982, Talcott National became Leucadia National, and the brilliant investing and divesting of assets had begun in earnest and one of the best track records in history was established.  We could go on and on about the list of remarkable investments but literally, the track record results speak entirely for itself.  Every step of the way, the dynamic duo made the right calls and Joe was the master of details, negotiation, tax structuring, and value creation.  The partnership is known universally as one of the very best in business history, and one that serves as a model for all. 

In 1987, Rich and Andrew met Joe while they were young lads working at Drexel (where Joe had convinced Andrew to start his banking career) and they were instantly overwhelmed by the intelligence, tenacity, consistency, patience, discipline, negotiating ability and understanding of risk that Joe displayed every waking hour.  Joe was (and is) the person that any young overachiever would beg to have as their mentor.  Joe took Rich and Andrew under his wing as only Joe can do . . . by torturing and scaring them to death to always go beyond any reasonable length to serve Leucadia, their client, to the best of their ability.  This invaluable lesson is ingrained today in everything that happens at Jefferies.  It is no coincidence that this philosophical passion for serving clients was also shared by the founder of Jefferies, Boyd Jefferies.

When Drexel went bankrupt in 1990 and Jefferies had no business even pretending to be the investment banker to an investment grade company like Leucadia, Joe never hesitated.  For the next decade, Jefferies was involved (leading) every deal that Joe and Ian executed.  Jefferies did its first high-yield bond deal, first investment grade bond deal, first equity deal and first convert deal all with Leucadia.  Joe’s loyalty, kindness and toughness fueled many sleepless nights and the countless exuberant closing dinners.  In 2000, when Rich wanted more capital to be competitive with the larger players on Wall Street to trade high yield and distressed bonds, we raised a fund and Joe delivered the anchor $100 million order – with his careful and watchful eyes always nearby.  A few years later Joe (and Ian) first met Brian when he joined Jefferies, and they showed him the exact same “tough love” that defines true respect and caring.  Brian was quickly hooked, and the partnership expanded for the benefit of every one of us. 

When the world was imploding in 2008, Rich and Brian wanted to put a belt and suspenders around Jefferies.  Joe conceived of an impossible swap (which was executed flawlessly and miraculously) and Leucadia became a 29.9% shareholder of Jefferies and Joe (and Ian) joined the Board.  This was done because Rich and Brian believed that it was prudent to protect the Firm and all our people and suffer some dilution so that we could play the long game.  The thought of getting bailed out by taxpayers or becoming a bank holding company never crossed our minds.  The arrogance of feeling invincible was left to the larger players and, as is usually the case, humble won out again thanks to Leucadia investing in Jefferies. This swap would wind up being another remarkable trade for Joe and Ian, but the reality is that the investment was actually the beginning of something even more special and important.

In 2011, after Jefferies survived the horrendous false attack (by a corrupt and incompetent “rating agency analyst” who shall go nameless), Rich and Brian decided the game needed to be changed completely if we were to continue our dream to build for the long term.  In 2012, driven primarily by Joe, Jefferies was merged into Leucadia and Joe (and Ian) selflessly gave every one of us the biggest gift possible: possession and control of their prized child, Leucadia.  Of course, in true Joe fashion, he did it in a manner that maximized value and opportunity for all of Leucadia’s shareholders, but he put Rich and Brian and Andrew (and all of the rest of us) in control of our destiny to build a company we could be infinitely proud of and that would create long-term value for all stakeholders.  Demonstrating his character and leadership, Joe never looked back and has been nothing but completely supportive of our initiatives, strategy, culture, investments, and risk management.  To this day, Joe remains the largest shareholder of Jefferies with a stake of approximately 10%.  Joe’s investment is a vote of confidence in every person at Jefferies, from one of the smartest investors in history.

Without Joe, there would be no Berkadia, our business partnership with Warren Buffett.  There would be no HomeFed, our in-house real estate business.  Joe allowed us to sell off myriad assets over the past decade at fabulous prices and then reinvest all of the proceeds in Jefferies and our shares.  In fact, the moat around Jefferies that we all enjoy as we deploy capital every day is due to Joe giving us the tools to create a long-term, durable operating business.  It turns out the master buyer and liquidator who always knew how to make enormous returns was really the one most responsible for allowing us to build the largest independent global investment banking firm.

Forty-five years is a very long time, but nobody should be prouder of their career accomplishments than Joe Steinberg.  Joe is an incredibly private person, and we will honor that, but share just a little.  His wife Diane is the love of his life, and he could not be prouder of, or love more, his three children and two grandchildren.  Joe is incredibly charitable and his largesse is always exercised quietly and for countless important causes.  Joe is the mentor to many.  While he kiddingly refers to them as his idiot nephews and nieces as he asks us to meet them, there are too many to count and each one is exceptionally smart, ambitious, and talented.  This is because, without a doubt, of the constant time and effort Joe puts into these relationships.  Joe loves Willie Nelson, John Wayne, good wine, and playing endless hours of poker with very wealthy people with nickel/dime antes.  Joe would rather be scuba diving, skiing or cycling with good friends, of which he has countless.

Joe, you have given every one of us at Jefferies more than you will ever admit or possibly realize.  You have trusted us with your life’s work, and you have inspired us all to be better every single day.  You keep the bar incredibly high with your expectations and because you are such a good and kind man, we will all work our hardest to never let you down.  Thank you for your 45 years of service and in particular, the last 15 directly at Jefferies.  Thank you for your mentorship, wisdom, kindness and long-term perspective.  You have changed the lives of the three of us, and you have done the same for the other 5,497 people at Jefferies who might not fully realize it until they read this note.

With great admiration and affection,

Rich, Brian and Andrew