Succeeding With Humility From Within And Confidence In Each Other Throughout

What are the two of us thinking about today?

• How do we do more and better help each of you serve our clients so that together we continue to build the Jefferies brand
• How do we help every person at Jefferies do better and feel better
• How do we best balance delivering a bigger bottom line for Leucadia and our other stakeholders, while continuing to provide fair rewards for our team and investing to build for the long term

For those of us who have been in the business and at Jefferies for a decade or two or three, the evolution in our industry and in our market position has been nothing short of breathtaking.  While others have been dreaming about putting the regulatory genie back in the bottle and staunching the litigation bleed, Jefferies has moved from being a hard-working mid-tier equity trading shop to now a top-ten, full-service competitor (and generally top-five in the things we care most about).  Can anyone think of a firm in our industry that has sustained this type of transformative progression?  The purpose of this note is to discuss where we see ourselves today and what the opportunity appears to be as we enter the last seven months of what we believe can be an incredibly productive 2017.

Together, we at Jefferies climbed through the ranks of our industry the old fashioned way.  We have always been and will continue to be:

• Tenacious and unwavering in our commitment to clients
• Focused on constantly improving ourselves and making everyone around us better
• Committed to remaining a flat organization where every day each one of us is an active player on the field.  While we all “want the ball,” we also know when it is time to “pass the ball” to a teammate or to simply just ask for some “help”
• Passionate about what we do and the important role our firm serves for our clients and our communities.  This belief and our resulting dedication to each other and our firm has helped see us through even the darkest of days

The sun is shining today and hopefully the warm rays will be with us for a while, although we will always be on the lookout for the clouds and storms that are a fact of life.  In this light, Jefferies increasingly is being seen clearly for what we are:  one of a small handful of Wall Street leaders helping our clients achieve their objectives.  In the U.S., and more and more in Europe and in selected areas in Asia, Jefferies now is recognized as one of a select few of dependable, capable and trusted partners for our clients in trading and investment banking.  Both of us are thrilled by the fact that today it is now rare to be in a room with a client where the discussion doesn’t immediately shift to them telling us that Jefferies is a special relationship for them and all the reasons why.  Every one of us should wake up each day appreciating this reality and make every effort to fully realize the amazing opportunity our unique position presents.  Since we individually and collectively strive to avoid any arrogance in our company, we will always maintain our “upstart” or “underdog” mentality and if that’s what we need to supply that extra bit of motivation, that works for us.  We have no interest in being a “me too mega bank holding company,” a “one-trick boutique” that can solve only one out of twelve client needs or a commercial bank that pursues investment banking, trading or research as a secondary or tertiary pursuit.  We are what we are and not only enjoy it, we are excited and energized about it.

The two of us together have invested a combined 40 years and an enormous amount of effort to help you bring together the Jefferies we enjoy today. We have worked with all of you to carefully select the businesses we are in, the people who lead them and the team of thousands that are truly responsible for driving our success. The two of us go to work each day with energy and enthusiasm that we draw from each of you.  We both have an honest sense of unlimited opportunity to build the best firm on Wall Street, coupled with a true responsibility to never let any of you down.  These are our motivations for sharing with you what we are currently thinking about at the beginning of this note.  

Our own daily efforts are focused on being shoulder to shoulder with each of you and our clients whenever and wherever we are invited and you see opportunity for us to help add value.  We remain focused on solving problems and creating opportunities that you bring to our attention.  We fully recognize and embrace the fact that all ideas and solutions start with each of you, not us.  We are still meeting capable folks from other firms who want to join the Jefferies tribe, and we are hiring those that meet our criteria and expand our potential.  We are also committed to making sure we continue to appreciate and value our existing team and provide careers versus jobs to the people who have done the heavy lifting thus far.  We are also doing our best to pay attention to each of you and help you have the resources necessary to do your job better and more easily.  There is no doubt that we have made, and will continue to make, mistakes as we work to balance all of the important constituencies that we are privileged to serve.  That said, we will always try our best to avoid mistakes, quickly pivot when needed, be open and transparent in our thinking, and be pure in our intentions to help make this the best firm possible for all of our benefit.

Achieving all our goals will take time, but the good news is that we have already invested more than a few decades in this effort and the even better news is that it really does seem to be working.  A lot of this is due to all your efforts, for which we are incredibly grateful. Some is due to an environment that has evolved to create an ever larger opening through which we can drive the Jefferies juggernaut.  No matter how we got here, we should all be feeling this moment, as it is filled with momentum and opportunity.  Our clients need and want us because our value proposition for them has never been better.  Please help lead us forward humbly, but with the confidence that collectively we have the resources to deliver and succeed.

Working with you every day, 

Rich and Brian