In recent years, Jefferies has established a foothold in Australia while ascending globally deep into the top 10 of investment banking firms. It has succeeded the old-fashioned way – winning one client at a time.
According to Jefferies Australia CEO Michael Stock, who established the firm’s operations in 2018, over two-thirds of Jefferies’ business is from repeat clients. The firm eschews the aggressive growth targets and performance metrics common at other investment banks and instead operates on the belief that success comes when you focus relentlessly on taking care of the client.
“People have asked me over the last few years, how big do you want to be in Australia and by when?” he says. “But we don’t have a target in terms of the size of our business or our team. When we see really good people, we just hire them.”
The only goal, he says, is to make sure things are done really well. “If we do good business with good clients, and it’s done by good people, our business will naturally grow over time,” Michael explains.
“We’re very patient, we’re very long-term and we are really focused on building sustainable, profitable growth in this market for Jefferies.”
Founded in 1962 with its global headquarters in New York, Jefferies has more recently established a heavy-hitting global presence that allows it to compete in the same league as giants in the industry, while retaining the flat, entrepreneurial culture that has defined the firm since its inception.
“The top-tier global investment banks are gigantic companies, our nearest comparable among them (Goldman Sachs) has 10 times the number of staff we have,” says Chris Kanoff, Jefferies’ Global Co-Head of Investment Banking.
“At the size we’re at, we can do virtually everything those firms can do, but we can be nimble and we’re able to talk to each other. Somebody like Michael can come in, and in a very short period of time he can know all the decision-makers at Jefferies and can access all the expertise that we have.”
Jefferies takes tremendous pride in its strong culture of collaboration, “I think the success of the Australia office goes to the credit of Michael and his senior team’s leadership, instilling the culture of our firm, and the ability to collaborate across markets,” Chris says.
This year, Jefferies announced record financial results, with global revenues rising 37 per cent to A$10.1 billion and investment banking revenues up 84 per cent to A$6.3 billion. Jefferies enjoys roughly a four per cent share of the A$142.6 billion market in leveraged finance, mergers and acquisitions (M&A) advisory and equity capital markets.
If we do good business with good clients, and it’s done by good people, our business will naturally grow over time. – Michael Stock
Jefferies has been consistently and deliberately expanding in Europe, Asia and Australia, helping to propel the firm to achieve well into the top 10 market share in the areas where it specialises. And this growth, Michael says, is testament to the high levels of repeat business the company’s clients entrust them with.
“In my short period here, the firm has continued to grow substantially, particularly in non-US markets,” Michael says. “The framework and scale of our firm globally is powerful, and this combined with our bespoke approach to bringing very specific solutions to our clients has underpinned the growth in our business and our results.”
Jefferies has distinguished itself in the marketplace by offering the kind of deep insights that ensure clients receive a personalised, differentiated experience. “Our business is all about our clients,” Michael says.
“Our focus and our path to winning is ensuring that the client is placed at the centre of everything we do in our firm. How we structure our sector and product focus, and our investment in talent across investment banking, equities and research, is to ensure maximum support for our clients, while drawing in our global firm to that network of capability.”
In Australia, that means clients are afforded the “best of both worlds” – the high-touch senior strategic guidance given by boutique advisory firms coupled with extensive global reach and access to international markets provided by a major multinational.
“We reinforce with our clients our obsession to provide deep, trusted senior strategic advice across not just their M&A ambitions, but also their capital markets and funding needs, while also being their window into the public market through our equities and research business,” Michael says.
“But when you need a global perspective and access to global specialisation and capital markets capability and distribution, we can provide that, too,” he adds. “This is a winning and differentiated formula, and to me it is very much the central premise of how we position our firm in this market.”
It’s important for us to be in most geographies, and we had an opportunity to join with Michael and enter the Australian market, and it seemed very obvious to us that we should take advantage of that. – Chris Kanoff
Michael has been in investment banking for over 30 years, the first third of which was spent working in Europe, followed by 20 years in Australia. Before he joined Jefferies, he was the Head of Investment Banking and Capital Markets in Australia for Credit Suisse.
“This was Jefferies’ first step into the Australian market,” Michael says. “The firm has continued to build out its global presence. We saw an opportunity to employ locally, and since we established the business through investment banking, we have now built out with over 100 professionals a fully integrated banking, equities and research business, with high quality leadership and an aligned purpose across all businesses.”
From Jefferies’ perspective, entering the Australian market was a natural extension of its efforts to have a truly global presence and cover every major market. “It’s important for us to be in most geographies, and we had an opportunity to join with Michael and enter the Australian market, and it seemed very obvious to us that we should take advantage of that,” Chris says.
Our focus and our path to winning is ensuring that the client is at the centre of everything we do in our firm. – Michael Stock
Half of Jefferies’ global investment banking business is M&A and 85 per cent of its advisory business is sell-side M&A. “And to be successful in the business of sell-side M&A, you have to have a view on who the buyers are globally,” Chris says.
But it’s no use rushing into a market without the best possible talent. “We can’t just open our doors and markets without having the right people, so when the opportunity came across our desk to build a business with Michael and the broader senior team he had targeted from the market, we grabbed it,” he explains.
That entrepreneurial but strategic approach is a prime example of how Jefferies puts its patient, long-term outlook into action. “We are here to stay,” Chris says, “and we are worth getting to know.”