This one caught my eye.. from NYT's "Jefferies Posts $77 Million Quarterly Profit"
The Jefferies Group said on Tuesday that it earned $77 million in its first quarter, as debt trading and investment banking showed renewed life after faltering in the second half of last year.1. Do you think BB’s are affected more by changes in the economy then boutiques? If so, why? In the end, is it all got to do with providing a client focused service? 2. There are several articles indicating that boutique IBD may become more popular and that BBs may have to focus on their other services more. Do you think this is true?
Beyond the revival in trading, the firm’s profit also shows the continued survival of a firm whose viability was questioned in the wake of MF Global’s collapse after a big bet on sovereign debt.
Two points:
1.) This is the same Jeffries that was rumored to be on the brink of insolvency / sale just four months ago. The markets are fickle - there really is not definitive right or wrong model. One model could be in favor today but easily fall out of favor tomorrow. http://dealbook.nytimes.com/2011/11/03/shares-of-jeffries-plunge-on-sov… http://www.altinvestors.com/2011/11/jeffries-to-go-bankrupt.html
2.) Jeffries isn't a true boutique. This is a huge bank with significant capital markets, research and sales & trading operations. Heck, the firm even has asset management and wealth management too, if I am not mistaken... Whether the boutique model works or not, I wouldn't categorize Jeffries as a true boutique in the vein of firms like Allen & Co. or Evercore. Within the spectrum of banks, Jeffries behaves more like a bulge bracket imo.
JEF is far from being a boutique. The only true 'boutiques' that have survived and proven themselves are quite rare.
I'm not sure what you mean by this. There are literally hundreds of small boutiques all over the country and many are doing well. Some have even managed to grow consistently through the recession.
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I was talking to someone and they mentioned this, the BB's are going to keep reigning in signficantly
The most intelligent and talented people I know have been choosing elite boutiques over BB the past few years. Honestly not even sure who the BBs are hiring anymore, all my friends are at Evercore/Moelis/Greenhill, unless we're just not the demographic they're looking for... Either that or we all just suck.
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