Operating as One Firm in One Very Big World!

Dear Clients, Teammates and Friends of Jefferies,

The two of us recently came up for a breath to realize and appreciate that today Jefferies has 48 offices in 20 countries around the world. This has been reinforced as the two of us have been enjoyably (and exhaustingly) traversing the globe to visit many of these Jefferies teammates and clients – our fairly recent international stops have included Dubai, Frankfurt, Hong Kong, London, Madrid, Milan, Mumbai, Paris, Rome, Seoul, Singapore, Stockholm, Sydney, Tel Aviv, Tokyo and Toronto. We have also traveled around the United States and happily visited a bunch of our U.S. offices, something we had done for decades. In recognition of the breadth of our company, we thought we would share with you the story of the evolution of Jefferies, why we believe our global footprint is so special, and how we expect it to drive value for all our stakeholders. 

Our story of building Jefferies is broadly summarized below by decade since one or both of us have been here:

1990-1999:  In 1990, Jefferies was a wonderful, small and entrepreneurial firm headquartered in Los Angeles that focused primarily on the riskless trading of blocks of stocks (mostly third market) and charged commissions of 5 to 25 cents per share for finding liquidity for institutional investors. We were proud of our $7 million of annual net earnings, the majority of which was the result of our hustling equity sales force. The 1990’s marked our foundational stage when High Yield Bond Trading, Equity Research, Convertible Bonds and Investment Banking were all established. While each of those businesses was nascent, they were the building blocks that would ultimately be the basis for our full-service investment banking and capital markets firm. 

2000-2009:  This was the decade that we began to solidify our strategy, primarily the build-out of a strong U.S. domestic franchise. We pursued industry verticals in our Investment Banking effort, including purchasing a handful of sector M&A boutiques, expanded our research footprint, developed a leveraged lending underwriting business in partnership with our friends at MassMutual, navigated the dangerous volatility towards the end of the decade, enhanced our Fixed Income platform and began to get serious about replicating these capabilities in London. 

2010-2019:  While we continued our build-out in sector verticals, we intensified our investment across Europe and began late in the decade to develop a footprint in Asia. Slowly, but surely, offices opened on the Continent, and our consistent effort was focused on being a more global firm. In some ways, we were becoming “global enough,” although we knew there was more that could be done. 

2020-Today:  Over the last almost half decade, circumstances have allowed us to become truly global. We always do our best to play offense when the world is upside down or distracted, and the rapid rise in interest rates (and corresponding decline in capital formation) created the ideal opportunity for us to invest. Some of our competitors had changes in strategic direction, leadership changes or other challenges that led to the availability of incredible human capital on a truly global basis, and we, in typical Jefferies fashion, pounced on the opportunity. Our Hong Kong office has been expanded to become our third regional hub, complementing New York and London. We opened or expanded our presence in India, Japan, Australia, Southeast Asia, Dubai, Tel Aviv, Canada, Italy and Spain, and we even planted roots in Latin America. We have all been very busy during this lull in capital formation.

Today, Jefferies is indeed a truly global firm, and while we have much work to do to further integrate and round out our capabilities, we find ourselves in a position that we historically only dreamed could someday happen. More importantly, as our clients have grown larger and more global, we find ourselves in a much better position to fully serve them.

Back to our recent travels around the globe. The intensity and sheer volume of our recent travel has meant a lot of time on airplanes to consider the lessons and experiences of building and operating a much broader and geographically diverse firm:

1. Local Cultures.  We believe it is critically important that we allow each office to preserve, maintain and be led by the fabulous and unique aspects of each local culture that makes each part of the world distinctive and special. We respect local customs, priorities, diversity and style. We want every office to be populated by people who can continue to be their authentic selves and feel great about bringing their culture and perspective to their partners at Jefferies.
2. Jefferies Culture.  We believe that, regardless of local customs, the Jefferies culture, values, moral compass and respect for each other must be ingrained and embraced throughout our Firm. Absolute integrity, prioritization of clients, immediate elevation of problems, open door transparency regardless of title or stature, respect for all co-workers (especially juniors), high sense of urgency and flat hierarchy are all attributes that have allowed Jefferies to arrive where we are today. Without this culture throughout our 48 offices around the world, we will not be able to continue our progress in building a firm that we can all be proud to call our own.
3. Delivering Jefferies.  We have new A+ Jefferies partners everywhere we look. In most cases, our clients and existing co-workers are the ones who helped us identify and recruit our newest partners, especially over the course of the five years when our presence outside the United States truly blossomed. These new partners bring something very precious to Jefferies. Their clients trust and respect them implicitly because they have earned their relationships over many long years and through many different experiences and market conditions. Each of our new partners have at least one thing in common, which is why they joined Jefferies:  They need a super high quality, global and full-service firm to best meet the needs of their client base. Thus, we expect (and know it will happen) that our existing A+ Jefferies partners will seamlessly support and deliver all of our global capabilities to our new clients by supporting our new joiners with unconditional engagement. New clients who trust their long-time advisor, who, in turn, can deliver the very best global resources, is a recipe for success. We intend to do a lot of cooking.
4. Serving Global Clients.  The world has changed dramatically. Whether you are an investor or are managing a business, understanding or just focusing on one part of the globe is no longer sufficient for success. Clients on all sides of our business have grown larger and more global in their own right. The need for scale and a deeper understanding of how the world’s pieces fit together has never been more apparent. Cross-border M&A, accessing different regions for unique capital sources, global research highlighting supply chains, regional competitive differences and macro trends, comprehensive and global electronic trading capabilities, and on and on. Today, if you cannot check all of the boxes, it is all but impossible to best serve our client base who deserves and demands it. We are fortunate that we may be the only global, full-service, entrepreneurial (non-bank holding company) player capable of serving this critical need. We have much work to do to truly earn this important global position, but we have laid the groundwork and we are determined to focus on the day-to-day heavy lifting that the highest quality execution demands. 
5. The Right Partners Are Critical.  We have been fortunate along our journey to have remarkable partners who have complemented our capabilities and worked with us in unison so we can continue to best deliver for our clients. Historically, we have counted on our friends at Leucadia, Mass Mutual and Berkshire Hathaway to be key strategic partners. Each one is still incredibly important and valuable, and their strength and partnership continues to be found throughout Jefferies today. More recently, our Strategic Alliance with SMBC has become increasingly valuable to our clients, and thus to all of us at Jefferies. While still early days, the initial successes are abundant and increasing every month. Having a true global ally with an amazing brand, wonderful client relations and a fortress balance sheet is meshing incredibly well with our global full-service investment banking and capital markets firm. We believe our clients will be much better off as we bring SMBC’s capabilities to help them, and we have been encouraged by the reaction we have been getting from SMBC’s clients as we do our best to complement SMBC’s broad capabilities.  
6. The U.S. Remains the Center of Global Investment Banking and Capital Markets.  Finally, we are blessed that Jefferies, as the lyrics go, was “Born in the USA.” The U.S. is not only by far the largest market for investment banking and capital markets services, but also the market where much of the relevant skills and technology have been developed, and the reference market for the vast majority of the dialogue we have with our clients around the world. Folks all over the world still benchmark against their competitors in the U.S. and want to learn from our long experience here. 

Despite the fact that we tend to think and aspire in decades, we still believe these are early days for all of us at Jefferies. As we each traveled tens of thousands of miles recently, we were excited by what we saw and experienced. All of our offices are staffed with people we are proud to call our partners. Our new clients have embraced our entire Firm as warmly as our existing clients always have. We have all the pieces in place right now and it even looks like the markets are beginning to cooperate, at least for now. We cannot thank all of you enough for your support, friendship, commitment, and partnership. We look forward to continuing to see as many of you in person as is humanly possible. Thank you for your global partnership!

Landing at an airport near you soon,

Rich and Brian