Jefferies has spent years investing in an equity business built on global talent, first rate structuring and unparalleled distribution capabilities. In a tumultuous year, the firm’s edge over its competitors was clearer than ever. Finishing in pole positions across multiple rankings for the region, Jefferies is the worthy winner of ECM Bank of the Year in the UK and Ireland.
For much of 2021, the ECM space played to Jefferies’ strengths. There was huge interest in tech and growth-oriented stocks in sectors like consumer and healthcare, where the firm is exceptionally strong. This included a £190m IPO for Darktrace, chosen as one of GlobalCapital’s Outstanding Equity Capital Markets Deals of 2021. Most of these companies coming to market were mid-caps - a foundational segment for Jefferies where its brokerage and distribution is second to none.
Yet the bank’s success also spanned a wide range of deals. The first part of the year may have been characterized by a procession of growth-stock IPOs. But the dynamic then shifted to capital raises, allowing the bank’s investment companies business to shine. In the UK, the bank ended the year having priced 44 transactions, eight main market IPOs and raised $12.5bn for companies and shareholders.
“It was an outstanding year,” says Dominic Lester, European head of investment banking at Jefferies. “We were in the right place with the right tools and established ourselves as the top global coordinator by number of deals.”
“It was an outstanding year. We were in the right place with the right tools and established ourselves as the top global coordinator by number of deals.
But this is not simply a story of a bank being in the right place at the right time. Jefferies’ stellar performance was down to years of commitment to ECM at a time when many other banks opted to disinvest. Jefferies has not only maintained its equities business but moved it from strength-to-strength. Rivals either dissolved their mid-cap desks or rolled them into large-cap operations. Jefferies boasts unique mid-cap focussed sales teams and a dedicated UK SMID-cap team.
“Our investment in equities was somewhat against the grain,” says Rob Leach, the firm’s European head of ECM. “But it’s left us in a great position, where we have excellent analysts and researchers across all sectors and skilled bankers to build relationships.”
The firm stands out in other ways, too. Many banks narrowed down their clients to the largest asset managers or hedge-funds. Jefferies can boast 1,500 institutional clients at a time when its competitors are down to a few hundred. This allows it to reach specialist long-only buyers across Europe, the US and Asia. The firm has over 200 salespeople across the globe with specialist expertise - an asset that came into its own as meetings moved online amid the pandemic.
“We built up a track record of delivering sometimes double the number of investor meetings and so producing twice the volume of feedback in this new environment,” says Lester. “For the first time clients saw that our claim to having more salespeople than anyone else wasn’t a marketing concept - it was the reality.”
The bank is able to send senior sectoral experts to speak to investment managers - the very opposite of the automated approach to the sales process found elsewhere in the market. All this is key to Jefferies' focus on “de-risking” a transaction for the issuer.
We spend months on investor-issuer interaction, finding the right price, the right commitments before the public phase. It’s one of the ways we really differentiate our offering.
“We spend months on investor-issuer interaction, finding the right price, the right commitments before the public phase,” says Leach. “It’s one of the ways we really differentiate our offering. Clients see just the diversity of our distribution and that we can find investors that others can’t.”
This is the case in calm markets and in choppy waters. Jefferies worked on a host of deals that printed against a backdrop of ample appetite. But Leach also points to an IPO for Czech payments platform Eurowag, which Jefferies guided to completion in highly challenging conditions, finding two of the three anchor investors and proving its value as a global coordinator.
“What we have in terms of sector capability and relationships is very powerful,” says Lester. “We are now recognised as one of the leaders in the ECM business and we will keep delivering the same successful results with larger deals.”
