(Reuters) – Jefferies Financial Group said on Tuesday it planned to reduce the size of its merchant banking portfolio as part of a restructuring to focus on its global investment banking business.
The plan includes spun off its stakes in Vitesse Energy before the end of this year to create a new publicly traded oil and gas company to be listed on the New York Stock Exchange.
The financial services company will also sell its wood and lumber products business, Idaho Timber, in two transactions for a combined $239 million.
Jefferies’ merchant banking portfolio, which includes investments in real estate, oil and gas and public companies, was worth $1.6 billion at the end of May, according to a regulatory filing.
Jefferies’ investment banking and capital markets revenue fell 31% in the three months ended May 31, mirroring those of Wall Street banks JPMorgan and Morgan Stanley after a record run in 2021, as geopolitical unrest and fears of an impending recession strangled trading.
The company also aims to merge Jefferies Group, its U.S.-based investment banking arm, with the parent company by the end of fiscal 2022.
He also said Matt Larson, chief financial officer (CFO) of Jefferies Group, will take over as the holding company’s chief financial officer after the merger. Larson will replace Teri Gendron after she leaves the company next year.
The Leucadia conglomerate renamed itself Jefferies in 2018 after divesting non-financial assets. (https://reut.rs/3ziGS8u)
(Reporting by Mehnaz Yasmin and Manya Saini in Bangalore; Editing by Vinay Dwivedi)
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