Jefferies is paying BIG, but it's also incredibly fussy about who it hires

With the exception of Glencore, which only really wants people with a commodities background, Jefferies is shaping up as the place to be.

Following its acquisition last week of Prudential Bach, a US commodities and financial futures broker, there's been speculation that Jefferies is metamorphosing into either a Goldman Sachs or a DLJ.

In the first case, it could be the great bank of the future. In the second case, it's likely to be purchased by a larger rival.

Either way, Jefferies is hot. It is also hiring. And we understand it's paying very well.

Building in M&A

This year in London, Jefferies seems to be focusing on building its M&A business.

Hence, it hired a joint head of European M&A and five other investment bankers from Morgan Stanley in March.

And it hired an MD from BAML in February.

Headhunters say the buildout is most definitely not over. Jefferies is still in the market for M&A bankers in London.

Two year guarantees

We also have it on good authority that Jefferies is offering two year guaranteed packages to those who join.

This is despite the fact that the FSA has outlawed guarantees in all but exceptional circumstances and has outlawed two year guarantees in all circumstances.

However, as Jefferies isn't a tier one firm (as defined by the FSA), the feeling appears to be that it's able to fly below the radar and pay outlawed packages where larger firms can't.

Jefferies didn't immediately return a request for comment on this.

Extreme fussiness

Given Jefferies' popularity and generosity, we also understand there are queues of corporate

financiers waiting to join.

However, Jefferies is said to be extremely choosy about who it hires.

"They do the most enormous amount of due diligence," says one M&A banker who was approached to work there before Jefferies changed its mind. "One minute they're keen and the next they say they don't want you.

"They want people from tier one organisations, but they also want to be completely sure you'll be able to bring deal flow with you," he adds. "Just because you're at Morgan Stanley or Goldman doesn't mean you'll automatically get in."

Based on conversations with other rejected candidates, he estimates that only around 25% of the M&A candidates Jefferies approaches as potential hires actually pass its rigorous assessments and are offered a job. "They're very selective," he says. "People from top name banks are being turned down."