Jefferies’ record equities haul offsets asset management slump

Jefferies Financial reported a record equities trading haul, which helped the investment bank exceed third-quarter profit estimates on Monday. Despite this success, its asset management business experienced a decline, with fees and investment return revenue dropping significantly from the previous year.

Global dealmaking has surged to $4 trillion this year, as companies take advantage of a more favorable regulatory environment to expand their operations. Jefferies' investment banking revenue grew by 17% to $1.33 billion, fueled by record advisory business performance and strong equity underwriting.

The New York-based company's performance is closely monitored on Wall Street, offering an early indication of quarterly investment banking trends before major US banks release their earnings. Revenue from capital markets, which includes Jefferies' trading desks, increased by 11% to $802 million, driven by robust equities trading activity.

CEO Richard Handler and President Brian Friedman expressed optimism about the balance of 2026 and the momentum heading into 2027, attributing this confidence to the breadth and strength of their current backlog and new business activity. The company remains confident in the long-term outlook for the asset management business, despite the recent setbacks.

In the three months ending August 31, profit attributable to Jefferies shareholders amounted to $260.6 million, or $1.08 per share. Analysts had estimated an average profit of $1 per share, according to data compiled by LSEG. However, Jefferies' shares experienced a decline of 1.5% in extended trading, marking a 24% drop in value for the year.