Our Promise to Jefferies Clients
Dear Clients (and employee-partners),
Jefferies’ investment banking revenues have grown at a compounded annual growth rate of nearly 20% since we entered this business 29 years ago and we are approaching a $2 billion annual run rate. Our sales and trading growth rate has been nearly 10% over the same period since 1990. This is entirely a result of the trust, partnership and loyalty of our most important constituency: you, our valued clients. Many firms in our industry are caught up in individual transactions, specific trades, processing deals, or being a counterparty or product purveyor. For this quarter’s note, we thought it would be worthwhile to remind ourselves and all of you of what we believe our compact is with each of you, our Jefferies clients. You are the ones who have enabled us to build our firm, and every one of us at Jefferies is extremely grateful.
The Jefferies Promise to our clients:
1. We will always put our clients first at Jefferies. This is an easy thing to say and live by 95% of the time because things are generally straightforward and true conflicts are not an everyday occurrence. However, it is that other 5% of the time when the rubber meets the road. Those are the times when the tough calls need to be made, and the firm must rally together and prove that we truly think and act “long term.” For us at Jefferies, it is these critical minority of situations where we have the chance to truly distinguish ourselves in the eyes, minds and hearts of our clients.
2. We will always prioritize, protect and improve the culture of Jefferies. We do this not only because this is the way we want to live our daily lives, but because this is the best way for us to truly serve our clients. A culture based on honesty, transparency and integrity means that our clients never have to worry if we mean what we say. We have no agenda besides what is best for you and our clients can trust our words and intent. Additionally, when our culture is healthy and strong, it means that we are truly collaborative and only then can we deliver the best of what Jefferies has to offer. This means that, when you work with any individual at Jefferies, that person is committed to and capable of delivering the entire firm for the client’s benefit. No fiefdoms, no political games, and no fighting over credit or fees. Our goal is to always act as one firm and to deliver the firm in its entirety to our clients. Every resource, every idea, every option and every capability must be efficiently and effectively delivered to you, our clients.
3. We are committed to constantly invest throughout the Jefferies platform so we can best support our clients in an ever-changing world. This requires discipline, long term commitment and the will to invest. For the first half of this year, we have hired over 350 new professionals into Jefferies, which represents nearly 10% of our end of 2018 headcount. They joined across the firm in all areas where we touch clients or need support to effectively execute for you. We have found unique candidates in research, where others are paring back. We have continued our broad buildout in Europe and Asia, where markets are challenging. We have spent a great deal of money on technology, whether it is to help with better trading execution or to make our investment bankers more effective in addressing our clients’ needs. Our clients’ worlds are changing rapidly and we are committed to investing our time and capital to make sure we are prepared to best help our clients thrive.
4. We are committed to excellence at Jefferies. This means our people must have the right industry expertise, they must fully understand all the nuances of every product and service that can be provided, and they must be up to the minute on every aspect of the financial markets on a global basis. There can be no holes in our performance or weak links in our chain of execution. We need to provide the right perspective and advice and then we have to achieve the optimal execution, every single time. We must prove ourselves and earn your trust every single time we work together. You trust us with your most important opportunities and needs, and we won’t let you down.
5. We are committed as permanent partners. As we stated upfront, we don’t view what we do with our clients as trades, transactions or deals. We are not a counterparty or product purveyor. We will be your loyal confidant, alter ego and partner for as long as you will allow us. Nearly 80 percent of our investment banking revenues today represent repeat business from existing clients. This means that we will be with you when you are doing exceptionally well, as well as when you experience the inevitable setback, no matter how bad it may appear or feel. It also means we will be with you not only when the markets are healthy, embracing, and easy, but also when the world is upside down and nothing appears to be working. We have proven this to our clients these past three decades, but we still must prove it going forward each and every day. We fully recognize that past accomplishments are nice, but all that truly matters to our clients is today and tomorrow.
This mid-year note is not just a reminder of our promise to our clients, but a sincere “thank you” for all you have done for us. All of us at Jefferies feel very privileged to share our promises with all of you. The reason is simple, you have all done the same for us for a very long time by showing your loyalty and commitment to us. We look forward to working together in the second half of 2019 and into the decades that will follow.
With great appreciation and our promises extended,
Rich and Brian