Wall Street investment bank Jefferies Financial Group Inc. JEF-N hired away most of the senior members of rival Barclays PLC’s Toronto office on Wednesday, dramatically boosting its Canadian operations as part of a global expansion strategy.
The five Barclays dealmakers Jefferies recruited are a group that has ranked among the country’s top advisers on takeovers and financings for clients in tech, telecom, energy, mining, financial services and private equity. Jefferies first opened an office in Canada in 2012, with staff focused on referring clients to bankers outside the country.
Jefferies, backed by Sumitomo Mitsui Financial Group Inc. SMFG-N, one of Japan’s largest banks, is recruiting during a slowdown in merger, acquisition and financing activity. Many dealers are laying off staff, and several large lenders, including Credit Suisse CSGKF and Silicon Valley Bank, have gone out of business.
Among the recruits is Bruce Rothney, former chair and chief executive officer at Barclays Canada, who will now lead the Jefferies Canadian team.Mr. Rothney previously held senior roles at Royal Bank of Canada and Goldman Sachs Group Inc., and advised Rogers Communications Inc. on its recent acquisition of Shaw Communications Inc.
Jefferies also hired Barclays’ former head of mergers and acquisitions, Trond Lossius, who previously worked at Bank of Montreal; and James McKenna, who was head of Barclays’ diversified industries team, and before that was a tech and telecom banker at RBC. Two other senior Barclays bankers are also expected to join Jefferies, but are still in talks with their current employer.
Jefferies declined to comment on the moves. The investment bankers are expected to take several weeks of what is known on Bay Street as “gardening leave” before starting their new jobs, to avoid possible conflicts of interest.
A number of executives have departed London-based Barclays since the bank appointednew leadership at its U.S. arm in January. Several Barclays veterans – including former global head of investment banking John Miller – now have leadership roles at Jefferies.
Jefferies, founded in 1962 by Boyd Jefferies, who initially worked from a phone booth at the Pacific Coast Stock Exchange, traces its roots to trading stocks and junk bonds. The bank has grown dramatically over the past decade in the U.S. and Europe by poaching experienced financiers from rivals and building expertise in mergers and acquisitions, private equity and high growth sectors such as tech and health care.
In June, when Jefferies reported its most recent financial results, its chief executive officer, Richard Handler, said in a news release that changes at the bank’s primary competitors “are creating further market opportunity for our Jefferies platform and allowing us to recruit talent.”
Jefferies’ goal in Canada is to win roughly the same market share the bank has built in the U.S., according to two sources familiar with the bank’s strategy. The Globe and Mail is not naming the sources because they were not authorized to speak publicly.
Statistics from data service Dealogic show that Jefferies ranks fifth among investment banks for total fees from U.S. transactions in the year to date, with a 3.6-per-cent share. Barclays came in ninth. (J.P. Morgan Chase ranks first, with 10.3 per cent.)
In Canada, Dealogic’s data show Barclays ranks fifth – tops among banks based in foreign countries – while Jefferies doesn’t crack the top 20 dealers.
Jefferies is a public company, listed on the New York Stock Exchange, with a US$7.9-billion market capitalization. In 2021, Jefferies struck an alliance with Sumitomo. The Tokyo-based bank committed US$3.4-billion to Jefferies in return for a stake of up to 15 per cent. A key element of the partnership is giving Jefferies’ customers access to loans from Sumitomo, while the Japanese bank’s clients get advice on deals from Jefferies.
Barclays has been operating in Canada since 1929 – former prime minister Robert Borden and former federal finance minister Michael Wilson both worked at the bank – and it continues to have a significant presence in Toronto.
In an e-mail, Barclays spokesperson Andrew Smith said the bank “has successfully operated in Canada for close to a century, and we remain committed to Canada, to supporting our clients, and will continue to invest in talent and opportunities there.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
