Jefferies has apparently put its new recruits to good use. Richard Handler’s advisory house, which added a whopping 121 people in 2017, made a massive leap up the U.S. M&A league tables during the first quarter of 2018, displacing the likes of Barclays, Evercore and Citi, among others, according to new data from Dealogic.
Jefferies finished fourth in U.S. advisory M&A revenue during the first three months of the year, trailing only the traditional big three: J.P. Morgan, Morgan Stanley and Goldman Sachs. It booked $167 million in revenue in the U.S. in Q1, good for a 5.6% total market share. Jefferies finished 10th in the same league tables during the first quarter of 2017.
The cheery news for Jefferies shouldn’t be all that unexpected considering their recent recruitment efforts. The former boutique employed 3,450 employees at the end of 2017, up from 2,270 in 2008 and the most since before the financial crisis.
Jefferies most recently poached a trio of technology-focused investment bankers from Wells Fargo, headlined by Michael Long, a managing director within Wells Fargo’s TMT investment banking team, who was named global head of tech enabled services at Jefferies back in November. Two other Wells Fargo veterans – Thomas Wilson, former head of business and transaction services at Wells Fargo, and Patrick Bailey, a former director with the firm’s TMT banking team – joined Long toward the end of 2017.
The ability for Jefferies to attract plenty of fresh blood is likely directly related to the firm’s newfound willingness to dole out large salaries and bonuses for top performers. Jefferies allocated $1.83 billion for its employees during its last fiscal year, working out to around $530k per person, according to Bloomberg. That’s the most since 2008. It's also known for paying its generous bonuses in cash.
Meanwhile, M&A volume in the Americas increased 51% year-over-year across the industry during Q1, with the number of deals valued at over $1 billion hitting an all-time record. Much the damage was done in healthcare, an industry that Jefferies has specialized in over the years, though not without controversy.
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