Jefferies Financial Group (NYSE:JEF) used its Investor Day to emphasize the scale it has achieved in investment banking and capital markets, its plans to increase operating leverage and its expectation that asset management results will become more consistent following a planned Hildene transaction.
Chief Executive Officer Rich Handler said the firm has reached “critical mass” as a global investment bank, citing its geographic reach, client relationships and expanded capabilities. He said Jefferies intends to continue investing in people and technology while bringing a greater share of revenue growth to the bottom line.
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Handler also highlighted capital returns. He said the company repurchased 2.725 million shares in recent weeks and, during the first 10 months of calendar 2026, returned capital through dividends and buybacks approaching 11% of tangible book value. Since late 2018, Chief Financial Officer Matt Larson said, Jefferies has returned approximately $6.4 billion to shareholders and reduced fully diluted shares outstanding by about 24%.
Core businesses drive revenue and profit growth
Larson said Jefferies generated $8.5 billion in net revenue, more than $935 million in net earnings and a 13.1% return on tangible equity over the trailing 12 months. Investment banking and capital markets accounted for more than 90% of current revenue, reflecting the firm’s strategy of prioritizing client-driven businesses while reducing exposure to legacy merchant banking assets.
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Since 2023, revenue in the Investment Banking and Capital Markets segment increased 74% to $7.8 billion, while pretax profit rose more than 150% to about $1.3 billion, Larson said. The segment’s pretax margin increased from 11% to more than 16%.
The company said it is beginning to see operating leverage from previous investments in infrastructure, technology and personnel. Adjusted non-compensation expenses in the segment increased 37% since 2023, compared with a 75% increase in adjusted net revenue. Larson said Jefferies’ adjusted non-compensation ratio declined to 24% from 30% over that period.
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President Brian Friedman said the firm expects further compensation leverage as the pace of broad-based senior hiring subsides. He said Jefferies has largely completed the investment-banking recruitment cycle that expanded the platform, though it will continue targeted hiring.
