Jefferies big banker hiring has paid off, sort of
In case you didn't notice, Jefferies has been one of the big recruiters of the recent era. Whether it's bankers fleeing Credit Suisse or bankers leaving Morgan Stanley, Jefferies has been hiring them all. And it still seems to be recruiting: in a recent letter to staff, Jefferies' ever-amenable CEO Richard Handler said the bank is still "selectively hiring additional A+ talent." It's spent a lot of time interviewing and recruiting "exceptional new partners."
Today's Jefferies' investor day presentation clarifies the extent of the bank's recent enthusiasm. As per the charts below, Jefferies has been adding talent across investment banking, capital markets (sales and trading) and asset management since 2019.
Source: Jefferies
Within investment banking alone, the chart below shows the breakdown between all-banker hiring and the hiring of new MDs. Since 2020, Jefferies' investment banking division has added 80 managing directors and 464 bankers to other ranks, an increase of 37% and 48% respectively.
Source: Jefferies
Unfortunately, and as the chart also makes clear, revenues haven't increased in proportion with headcount. They are on track to be up by around 20% this year versus 2020.
This isn't actually bad-going given the pain in evidence elsewhere, and indeed Jefferies notes that its market share has been going up and up. And yet, it's also clear that investing in bankers in a banking downturn is a long term game. You're not going to get back what you put in for a while, even if you do seize a larger portion of a shrinking pie.
Source: Dealogic/Jefferies
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