Eight Things to Be Thankful for in November at Jefferies

Team Jefferies,

As we head into November, we wanted to take a moment to reflect and think about what we are most thankful for as we close out Jefferies’ 2024 Fiscal Year at the end of the month. Here are our top eight:

1. Health.  While it is easy to get caught up in the frenetic, moment by moment pace of life in our chosen profession and firm, every one of us can use a friendly reminder that none of what we do is possible without the mental and physical health of ourselves and loved ones.  As we go about our daily lives, let’s be appreciative for all we have and extra sensitive to those around us who are living through quality of life challenges, whether they are small or big.  We are in this together, and it is up to every one of us at Jefferies to be there for one another. 
2. Family.  No deal, no trade, no research report, and no operational project is more important than our respective families (and friends).  It is up to each one of us to help each other keep things in the proper perspective and be happily available to help those with balance issues best handle and juggle their responsibilities. This includes everyone in the Firm and gets exponentially more important as you go towards the more junior portion of Jefferies.
3. Culture.  Our competitors love to speak pejoratively about the culture of Jefferies.  They try to judge us, label us, minimize us and put us in some certain box that they hope will contain us.  We have been experiencing and living with this for decades.  It does not seem to matter when larger companies who belittle us disappear, culture carriers from competing firms regularly join us, or their most prized clients select Jefferies with their most notable transactions over the historical status quo.  All of us know that the reason for this is the spirit of our people, the connectivity, teamwork and trust within all of our people and offices, and the sense of mission we all feel the moment we walk into any one of our 47 offices in 22 different countries.  It comes down to having a firm made up of good people who care.  Our competitors can call us whatever they want, the only thing that is obvious to all of us is that our recipe seems impossible to replicate.
4. Clients.  We no longer have to tell our clients what Jefferies is or what we do.  In many ways, this is because our clients have helped us build Jefferies for decades through their trust and loyalty.  They have allowed us to grow with them as they acknowledge and embrace our small role in helping them succeed.  They are probably our best source of help when it comes to recruiting new talent where they see holes in our Firm that can be filled with people they like and respect.  They have rewarded us by showing their support as we go through the inevitable good times and bad, just as we pride ourselves by doing well for them.  Without our clients there is no Jefferies.  When our clients become our true friends, Jefferies is unbeatable.
5. Board of Directors.  Our Directors are the ultimate stewards of Jefferies.  Most of you do not see them often, but they are omnipresent.  Our Board is informed, educated, aligned, committed, experienced and smart.  They are also very knowledgeable about our Firm, diverse in every way, including personal and professional, and most importantly have no other agenda other than what is in the best interest of every Jefferies constituency in the long term.  The right Board of Directors allows our management team to execute the plan to the best of our ability because, at the end of the day, we know they understand and approve of our strategic direction, priorities, culture and purpose.  It is easy to take a board for granted and assume they are all high quality.  Since the two of us know this to be 100% factual, we thought this would be a good time to remind each and every one of you so that nobody at Jefferies ever takes this for granted.
6. Stakeholders.  All of our capital that we use every day to serve our clients comes from our bondholders and stockholders.  As our days turn into weeks and then quarters into years, it is easy to forget whose money is funding us.
   1. Bondholders.  Let’s start with our bondholders, because, if they are not content, no stakeholder can be happy.  We are greatly appreciative of the trust that our rating agencies and bondholders have in all of us at Jefferies.  This is why we drive everyone nuts on the aging reports, level three assets, liquidity buffers and the like.  Our rating agencies and bondholders have given us the benefit of the doubt in moments of extreme stress (where others did not deserve the trust) and this is something nobody at Jefferies should ever stop being thankful for.  Our culture of zero arrogance is crucial to make sure we never take our funding or balance sheet for granted.  If other firms in our industry understood this, our competitive position would not be close to the remarkable position we find ourselves in today. 
   2. Shareholders.  We all serve at their pleasure since they vote for our Board and own our Firm.  We believe it is up to all of us to be completely open and transparent with our shareholders on every aspect of Jefferies.  We will explain our strategy in advance, provide an honest assessment along the way and quickly communicate honestly everything that goes wrong and why and how we intend to fix it.  We are instantly accessible and happy to honestly discuss all aspects of Jefferies (always within the confines of Reg FD) to the best of our ability.  What we will not do is market or “promote” our stock.  We won’t give earnings guidance because, quite frankly, we do not know what it will be in the short run.  And finally, we will not do anything that will make the short run appear better that involves sacrificing long-term success.  One of our many (not so secret) weapons is that 36.5% of our $16B fully distributed market capitalization is owned by Jefferies employees/Board and our Strategic Joint Venture Partners.  We are grateful for this alignment but, even more importantly, we are hugely appreciative that our independent shareholders have afforded us the luxury of thinking and acting exclusively with a long-term focus while operating as a public company. 
7. Strategic Joint Venture Partners.  We realized a long time ago that if you wanted to compete successfully in the land of giant banks, it helps to have some big friends.  Jefferies’ partners all have certain things in common.  First, they are all high-integrity people/institutions that have a long-term time horizon (matching ours).  Second, they are all incredibly substantive institutions that provide not only enormous amounts of capital, but more importantly a similarity in culture, priorities and human capital.  Third, they each bring complementary skills and assets that are all additive to those found at Jefferies.  Finally, they all have substantial skin in the game with us, and together we all have a hand or two on our collective steering wheels.  These partnerships are very hard to establish, but even harder to execute well.  With Mass Mutual, Berkshire Hathaway and SMBC, we all need to be grateful and constantly strive to do right by them, because these three are responsible for the Jefferies Strategic JV cup constantly overflowing with opportunity. 
8. Purpose.  We are grateful that our jobs allow us to be part of a firm that has purpose beyond dollars and cents.  Every one of us at Jefferies is keenly aware of our duties, and we work constantly to support all of our respective constituencies. But we each know there is more to our story than that.  Not only is our Firm consistently philanthropic (without agenda other than “doing the right thing”), but the vast majority of us globally give back to our communities with time, energy and resources constantly.  We all recognize how privileged every one of us is and we embrace our gift of being in a position to help the many others who are not as fortunate.  Recognizing this gift that we have to be able to give back should be at the forefront of every one of the 6,000 of us globally at Jefferies.

The two of us could not be more grateful for all we have in our lives.  This Firm and all of you are remarkable.  Please join both of us in giving it your entire all for the month of November as we sprint through the finish line of our Jefferies 2024 Fiscal Year.  This has been a very solid and highly respectable showing for all of us at Jefferies, particularly as we transition from the massive investment all of us have made these past couple of years as we took advantage of the recent market dislocation.  As we said at our Investor Meeting, as happy as we are for this successful transition year of delivering a 10% (YTD) return on tangible equity as we all lifted the organization to new potential heights, we are even more excited about our collective prospects for 2025 and beyond where we believe we can begin to truly reap all of the collective rewards from the firm we have built together.

Beyond grateful for every one of the more than 6,000 of you,

Rich and Brian