March 2020

A Time of Uncertainty, and a Time to Step Up At Home and At Jefferies

The Coronavirus has now expanded globally and is becoming a factor in every one of our lives.  None of us truly knows the scale and scope of what we will be dealing with, but there is no doubt that fear of the unknown is beyond unsettling.  The timing of this situation coincides with a remarkably positive backdrop for Jefferies that is the culmination of years and even decades of really hard work, dedication, perseverance, patience, creativity, passion and some periodic good fortune.  This intersection of an uncertain macro-environment primarily due to the Coronavirus and the blossoming of Jefferies into a leading global investment banking and securities firm is worth elaborating on.  For that reason, we would like to share some thoughts about our firm, our priorities, values, responsibilities and actions during this unique period of uncertainty:

1.  For every one of us at Jefferies, people we love and their health must always be our number one priority.  When the world is consumed with headlines like we have today, this means it is time to go the extra mile with the people most important to us and spend quality time to help, comfort, listen and show how we truly feel about them.  Every one of us is a son, daughter, mother, father, brother, sister, spouse and/or close friend of others.   People react to stress in different ways, and we all need to be extra sensitive and have a heightened sense of how we can best help those that depend on us for strength and support. 

2. We at Jefferies are co-workers and partners, but we all know we mean much more to each other.  We spend an enormous amount of time together working towards both individual and common goals and share in our successes and comfort each other during our setbacks.  We are a firm that cares about each other.  We also share a strong pride in collectively building Jefferies, which is truly our second home.  Let's not forget the pressures and challenges our partners have in their daily lives and make sure we are extra supportive of one another during this trying period.  Our culture is truly unique on Wall Street, and the fact is that our people at Jefferies are not just smart, tenacious, creative and hardworking, but also extraordinarily kind, supportive, generous, compassionate, empathetic and good-hearted.  Our people and the culture you all have created will enable us to effectively navigate this current uneasy environment, just like it has been our source of strength in many other challenging moments in our history.

3.  Jefferies is in a remarkably strong position today, more so than at any time in our history.  Our firm is flush with capital at both the operating business level and our parent company.  We have monetized numerous non-core assets at highly attractive levels and have been prudent and patient with the proceeds.  Our balance sheet is as clean as ever, especially when one considers how unknowingly late in the cycle we might be.  Our human capital is beyond spectacular as the combination of our long-term exceptional partners combined with a long list of amazing more recent partners creates the most powerful team the two of us have ever been associated with.  Our competitive position, market share, brand and diversification of our businesses in products, services and regions is at an all-time high.  Our firm has never been more focused, better aligned with our clients or more capable of moving to yet the next level.  Jefferies today is remarkably strong and we have all of you to thank for this.  If you have to go into a period of dislocation, it is always better to do so from a position of strength.

4.  Today marks the beginning of Q2.  The markets are panicked and volatile.  Uncertainty permeates every market and board room.  It is likely that this will continue for some time and there may even be some deeper bumps in the road ahead.  Everyone should have no doubt that we will all get through this period together and once again emerge even stronger on the other side.  We are not predicting massive destruction in the financial markets.   What we are saying is that no matter how this all plays out, and nobody knows for sure, we will emerge well.

5.  If there is one final thought we would like to share with everyone, it is this:  Our clients need us today more than ever before and yet again this is our opportunity to rally together to be there for them.  This is our time to take yet another step forward in our relationships with our clients.  We also know our clients at Jefferies are more than counterparties.  We know them, care for them and share a unique bond of friendship and partnership.  Emotionally and compassionately, we need to be there for each of them as they embrace their challenges and opportunities.  Since our firm is so strong and has such momentum heading into this dislocation, we have the privilege and responsibility to be one of the key reasons why our clients thrive through this period as well.  Some clients will suffer disproportionate stress due to their business focus, capital structure or business model.  We are positioned to help them in every way, whether it be clever ideas to access capital, maintaining liquidity in their securities, providing timely research or just clever advice and perspective that will help them in their board rooms.  Interest rates are super low now and we believe they are heading lower.  That will provide chances for clients to refinance again, extend maturities and optimize their balance sheets.  We need to be forward thinking, creative and aggressive in adding value.  Providing liquidity and investment ideas to our investor clients is crucial in periods like this.  Macro research thoughts and individual company coverage is critical in periods like we are now entering.  Smart mergers and acquisition strategies always emerge in times of duress.  A firm that operates as one and can unify all of their resources for each client is the firm that will become the ever more critical partner going forward.  Our firm is filled with world class people and capabilities, strongly capitalized, highly focused and fully committed to stepping up during a challenging and uncertain period to show the world who we are.  We are Jefferies 2020, and while the world is uncertain, we can't wait to start Q2 with each of you and deliver for our clients.  We have all worked hard to be where we are today and the environment is perfect for us to do what we do best for our clients, each other, and our loved ones.

With Jefferies Passion,

Rich and Brian

 

RICH HANDLER
CEO, Jefferies Financial Group
1.212.284.2555
rhandler@jefferies.com
@handlerrich Twitter | Instagram
BRIAN FRIEDMAN
President, Jefferies Financial Group
1.212.284.1701
bfriedman@jefferies.com