Jefferies CEO sees chance to expand in downturn
Investment bank Jefferies Group (JEF.N: Quote, Profile, Research, Stock Buzz) is on a hiring spree, snapping up traders and bankers laid off by credit crunched rivals despite posting three quarterly losses and facing daunting markets ahead.
Jefferies on Tuesday announced it had hired 25 equities sales, traders and research staff in Europe who formerly worked at Bear Stearns. On the same day, it added veteran Citigroup technology investment banker Mark Fisher in London.
These and a host of other moves spring from the same contrarian playbook Jefferies has used for 18 years, Chief Executive Richard Handler told Reuters. And with more top-tier talent thrown out into the streets, the hiring will continue.
“You really don’t get these kinds of opportunities unless things are pretty darn ugly,” Handler said. “You can’t build up an international equities business in a bull market. That kind of talent is just not available when times are good.”
It’s a bold bet that business will get better for a firm that lost $90 million in the past three quarters and is expected to announce a fourth-quarter loss of $9 million next month, as industrywide trading and banking activity slumps.
Jefferies slashed more than 200 jobs, reducing head count by 8 percent, during the first half pay day loans. It also shored up its balance sheet by selling a 14 percent stake to Leucadia National Corp (LUK.N: Quote, Profile, Research, Stock Buzz) for Leucadia stock, which it later sold, and $100 million in cash.
GOING ON OFFENSE
Yet Handler stressed Jefferies did not suffer the kinds of credit losses that have hobbled its bigger rivals. The Leucadia deal quickly helped boost its supply of dry powder for the battles ahead, he said.
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