Is jefferies middle market?

Historically JEF has been a MM bank that IMO is transitioning into an EB or some type of hybrid BB. Average M&A deal size is $1B which is much larger than a true MM bank. In September, they were #5 globally across all of M&A capital markets. They punch well above their weight. Hard to classify them since they are growing so fast.  

I consider Jefferies in between a EB and BB (leaning a bit more BB). It really doesn’t make sense to call it a MM bank because they aren’t pitching against other MMs the majority of time. Definitely a lot more brand recognition as well compared to other MM. Top groups at Jeff also beat both BB and EB all the time.

It's hard for Jefferies to break from the MM stigma since they were a labeled a MM bank right after the post 2008 banking shake up. The last five years have been different and they play more like a hybrid BB/EB now. Nobody working in the industry uses the BB/EB/MM label. It is something WSO obsesses over but Jefferies does not fit in any of these buckets. CS and DB are struggling and Jefferies will reap the benefits.

At a true MM bank where our average deal size is around the 500-600m mark - we pitch against Jeffries very routinely. Usual competition we see are Houlihan, Baird, Blair, Jeffries, Lazard and Piper - in that order

Jefferies vs. SVB?

difficult to define hybrid bank after a decade+ of aggressively poaching from BBs/EBs, shifting it away from MM roots. IMO the closest comp for what they’re trying to be is probably a pre 2008 investment bank (limited regulation and a wide range of IB product offerings including LevFin and equities, with supporting divisions like asset management / wealth management / research / trading). They're almost exactly the same size as Merril Lynch was in 2007 in terms of assets if you adjust for inflation.

I kinda wonder if they will try to balloon up the balance sheet more. Unless i'm missing some other regulatory nuance I think the 2018 bank reform act means they can have $100bn in assets with relatively minimal regulation and up to $250bn without being considered Too Big to Fail

Started in Jefferies London  before moving to a MM for my associate stint and then moving to a top BB at VP2. 

Good bank and good deal flow.

Terrible people, sweat shop and very toxic culture. Also in London is a very euro banker heavy set. So the office chat and banter is non existent. 

The bonus clawback is absurd. Not sure why anyone would join. It's a crude an ineffective measure to stop the churn of people.

Jeff is realistically an EB. It doesn't have a balance sheet and an almost non existent LevFin or DCM function outside of the US. 

Like everyone on here has said it’s stupid to try to classify it as a BB/EB/MM, not to mention those distinctions are useless and stupid.

Jefferies is a balance sheet bank - basically every deal they win (even M&A) is strongly aided by their balance sheet / lev fin capabilities, which is a huge asset. They’ll do lending situations that BBs can’t / won’t touch, so are super valuable for PE firms.

Trying to say they’re an EB is stupid - they certainly are not a pure advisory shop. Also have a way bigger tilt to sponsors, they don’t do as much work on the public / strategic side.

The best comps are other balance sheet heavy banks (Wells, RBC, etc) but think that Jeff clearly leads this group.

My personal take is Jeff kind of a deal mill, which means very wide range of experiences. As much as interns on here will MS me, they do plenty of  

All comes down to group at the end of the day, but I’d be surprised if anyone took Jeff over any BB/EB (except maybe some groups at UBS/DB and ignoring current CS situation). Would take Jeff over most if not all MMs, maybe a few exceptions in top MMs in their top groups (i.e if someone wanted to be in Midwest, Baird industrials or Blair tech would be reasonable over Jeff), but generally would say Jeff is probably the next best thing after BB/EB.

Has anyone mentioned that Jefferies is known as a MM bank but acts more like a hybrid EB/BB????? I feel like no one has made this point yet and it's very important. 

We work on too many large deals to be a MM in the same sense as Blair/Baird/etc., although we do pitch against MMs ranging from BlackArch types to William Blair very often. Our global presence and balance sheet aren't large enough to make us a true BB, although we do compete against them. Too much of our IB practice is built on our financing capabilities to be a true advisory firm like an EB. Best way to classify Jefferies is as a deal mill, as Jefferies has a very aggressive culture focused on chasing fees and landing mandates, and as a result you'll be working on anything from a large-cap deal to some low-quality LMM sell-side that no EB or BB would touch. Also something to note is Jefferies as a firm is heavily focused on "building its brand", and as a result a lot of groups charge lower advisory fees compared to an EB or BB.

Also, a result of Jefferies being a deal mill means that you'll be getting more M&A reps on average than if you were at DB or UBS, although our name and reputation still hasn't caught up to UBS (maybe to DB in the US), so for the commenter above asking about Jefferies vs UBS/DB, I'd largely say in the US it's comparable with trade offs for both sides.

Jefferies does largely have a very aggressive culture (driven top-down by seniors) due to the firm's salesmen-like practices (seniors earn a relatively large cut of the fees they bring in unlike the long-term bonus-models several EBs have that drives a more "advisor-focused" culture), driving a very eat-what-you-kill culture. Interestingly, one of my friends back in his analyst years lateraled to a CVP/PJT/PWP-type EB, and was essentially told that by the interviewer that because of the culture at Jefferies, the type of banker that comes from Jefferies personality-wise doesn't fit in with their firm culture and they essentially wouldn't ever hire someone from Jefferies past the associate level.

From the outside looking in, it seems to me that their focus is volume. I had a couple of friends from B-school that went in with high hopes and just got crushed. Both left within 9 months.

Some JEF stats for you all (as of Sept 2022):

• Avg. M&A Transaction is $1B

• 1/4 of all M&A deals are > $1B

• Global share of M&A ranked #6

• Global share of M&A Deals between 1B-5B JEF is #9 (was #11 in 2021)

Interesting point on Jefferies - brings more banking revenue in compared to most if not all EB's with a extremely lean deal team that rivals an EB. That being said, their deals are a little smaller but there is seemingly much much more of them. 

EB's are very prestige heavy. They want to be seen as the nice, sexy banks that only the top of the top can even dream of hiring. They hire people from those backgrounds. What some jefferies laterals have said when coming to my EB (MOE/PJT/EVR) is that it feels like coming from underground boxing into a fencing tournament. They're scrappy people looking to fuck the competition and get rich doing so.

That being said: I would 100% take them over UBS/DB. If I wanted to take a mid-tier bank I'd want something that is growing, not something that is dying out. DB just hit distressed credit levels by the way.

I wouldn't call them a Middle Market anymore. I know that ranking will stay with them for a while, but its just incorrect at this point. Are they a bulge bracket? Maybe, but their deal with mass mutual kind of renders that point mute. They seem to be a boutique with friends in high places. Are they an EB? Maybe one day, because their deal sizes have been growing for years now. So all I can say is wait: but you should definitely give them the respect they deserve. 

Literal chop-shop, take on a bunch of shitco deals led by the fact that they literally finance anything. 

no

I really don’t understand why there’s so much hate for Jeff.