Jefferies Equities Trading Hits Record $626 Million While Asset Management Revenue Falls 52 Percent

Jefferies delivered record equities trading revenue of $626 million, up 29 percent year-over-year, alongside $1.3 billion in investment banking driven by advisory gains. Fixed-income trading lagged with a 26 percent decline. Asset-management revenue, however, dropped 52 percent after stripping merchant-banking effects, leaving core revenue at just $13 million against Street estimates of $36 million. The misses trace directly to trade-finance exposures in Leucadia Asset Management.

Goldman Sachs lowered its 2026-2028 asset-management revenue forecasts by up to 22 percent and cut its price target 15 percent to $57 while retaining a Buy rating. The firm cited persistent multiple discounts applied to volatile earnings streams. This pattern reflects sector-wide pressure on non-core asset units amid higher capital requirements and scrutiny of illiquid credit exposures.

Market uncertainty and regulatory tightening on receivables financing amplify the incentive misalignment: trading desks capture upside from AI-driven volumes while legacy merchant-banking books absorb downside. Primary records show Jefferies has not resolved the underlying First Brands and Radiant positions, sustaining the discount. Next-quarter filings will test whether further write-downs accelerate or stabilize.

Compensation discipline and buybacks of 1.3 million shares mask underlying shrinkage in merchant activities. Investors now price the franchise at lower multiples precisely because documented volatility in asset management offsets trading records.