US-based investment bank and asset manager Jefferies' total revenues were down to $299 million (€270 million) for its fiscal first quarter (Q1). This compares to revenues of $592 million at the same time last year.
The firm’s losses were across many lines of its business, capital markets were down by 38% and its asset management division lost 20% over the year. But the pain was most keenly felt in its sales and trading, with fixed income down by 55% and equities by a staggering 99%.
Rich Handler, chairman and chief executive officer, and Brian Friedman, chairman of the executive committee, issued a joint statement and blamed concerns about the pace of global economic growth, outflows from the high yield market, forced selling from hedge funds, uncertainty over China, a potential Brexit, and an overall void in liquidity.
The firm’s abysmal performance in equities was attributed to a $145 million markdown related to two listed equity block positions, one of which was KCG Holdings, a market-maker and high-frequency trader it helped rescue in 2012 and its share of the results of Jefferies Finance joint venture. Its equities revenues declined to $2 million for the quarter from $203 million from Q1 of 2015.
“We are humbled by Jefferies’ quarterly loss and will strive to deliver the better results that our shareholders deserve and Jefferies is more than capable of achieving,” said Handler.
The firm’s assets under management were $7 billion, as of January 30, this year and it is privately owned by Leucadia, a US holding company.
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