The middle-market master Jefferies has been on a tear as of late, picking up tons of talent from bulge-bracket firms as well as outside the bulge bracket, doubling in size over the past five years. And now, it appears, this poaching and hiring spree is paying off.
During the first quarter of 2011, the bank beat analyst estimates, as trading revenue rose by 32 percent and investment banking revenue rose by 20 percent (versus the first quarter 2010). Overall, revenue rose 28 percent.
According to Jefferies CEO Dick Handler, the firm (the first investment bank to release its first quarter 2011 earnings) "has been stealing market share from bigger banks and other mid-size competitors." And according to Thomson Reuters, the bank is now ranked 17th in global M&A deal volume, having worked on $18 billion worth of transactions this year.
Underscoring its strategy of nabbing big-name bankers from big-name firms, Peter Bacchus recently quit Morgan Stanley to co-head Jefferies' European investment banking unit. And Handler says more big names will be coming soon.
He explains that "additional hires were being held back by 'garden leave policies of some of our competitors' -- an oblique reference to policies recently put in place by Bank of America that have delayed the departure of some talent from the Merrill Lynch division, according to recruiters."
Still, Jefferies is far away from regaining its pre-crisis footing: the firm is currently booking about half of the revenues it booked before the 2008 crisis.
(Related: 16 Sweet Non-Bulge-Bracket Investment Banks to Work For)