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Why you want to join Jefferies' expanding equities business. Or not

Jefferies is staffing up with equities bankers. In the past week it's hired Matt Foulds, the former head of Americas equity distribution at UBS. It's hired Bill Bell, the former head of electronic distribution for the Americas at Barclays. And it's hired Frank Copplestone, formerly of Morgan Stanley, as its global head of structured products.

Equities headhunters say there is almost certainly going to be more equities hiring from Jefferies in the coming months. And there's a good reason why UBS's equities business will be the US bank's preferred hunting ground. "Peter Forlenza, who was head of equities for the Americas at UBS, came in as Jefferies' global head of equities last April," points out one headhunter. "He's going to be picking people off the good people from UBS this year."

Morgan Stanley may also want to keep its equity derivatives professionals on lock-down. Copplestone, the former global head of retail structured products at Morgan Stanley, has gone permanent at Jefferies after spending several months consulting for the firm. Copplestone's consulting contract is said to have been spent looking at the opportunities for Jefferies in the equity derivatives space. Now that he's been hired full time, the implication is that Jefferies will be building its equity derivatives presence (and hiring).

Cash bonuses at Jefferies

If you're thinking of joining Jefferies, the US bank offers one clear advantage over larger firms with heavily deferred compensation: it pays a lot of cash.

Pay per head at Jefferies regularly exceeds $400k and all of this is dispensed in ready notes. The downside? If you leave Jefferies within 12 months of receiving your cash bonus, you will have to pay the entire thing back.

The other issue with Jefferies is that it (like most banks) can be a little up and down. Jefferies did a lot of hiring between 2009 and 2011, when its headcount globally went from 2,200 to 3,600. Many of these were fixed income hires, but Jason Griffith, head of equities at the bank between 2006 and 2012, said it also added 85 equity researchers during that interlude. Come 2012, the situation changed. In April, both Griffith and David Silber, head of American equities at Jefferies, left the bank after equities trading revenues fell 23% year-on-year in the first quarter. And in August 2012, Jefferies slashed its London-based equities research team in an attempt to cut costs.

However, whilst cutting with one hand Jefferies also bolstered its European equities business when it acquired Hoare Govett, the corporate broking arm of RBS in February 2012. By the end of 2013, Hoare Govett had around 100 corporate clients in the UK, each of whom has the potential to need equities sales and trading services from the US bank as equities issuance picks up. If you're based in the City, you can see why Jefferies might be an appealing bet, irrespective of its slightly flaky past. If you're based on Wall Street, here's a bank that's growing in cash equities, that pays well, and that seems to be on the cusp of expanding its equity derivatives business globally. On the other hand, you might be let go again in a few years' time....

Related articles:

Six reasons why you might leave UBS's thriving equities business 

Jefferies is paying cash bonuses again. Remember the sting in the tail 

The sorry tale of the senior UBS equities banker and the silly orange Ferrari 

AUTHORSarah Butcher Global Editor
  • Il
    31 March 2014

    This is really great!

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