American multinational independent investment bank Jefferies Financial has missed second-quarter profit estimates as weakness in the asset management industry overshadowed gains from robust dealmaking and equity underwriting.
The New York-based investment bank’s asset management fees and investment return revenue fell 35% from the 2025 tally on weaker performance across several fund strategies, including Point Bonita, which had exposure to bankrupt American auto parts supplier First Brands.
Jefferies has sought to reposition the troubled asset management unit by reducing capital allocated to certain funds after it disclosed plans in 2025 to buy 50% of credit-focused asset manager Hildene.
“In the short term, this has resulted in modestly lower investment return until we close our investment in Hildene, which we are targeting to complete in our third quarter and should be immediately accretive to results,” Jefferies CEO Richard Handler and President Brian Friedman said while announcing the Q2 results.
Profit attributable to common shareholders was USD 226.2 million, or USD 1.02 per share, in the three months ended May 31, missing the analysts’ expectations of USD 1.16 per share, according to estimates compiled by LSEG.
However, there was good news too. Jefferies’ investment banking division turned out to be the face saver for the company, as the department’s net revenue jumped 57.5% year-over-year to a record USD 1.21 billion, driven by a 47% surge in advisory revenue and higher fees from underwriting share sales. The results also give investors an early glimpse into Q2 investment banking trends on Wall Street, with large American banks poised to provide a broader picture in the coming weeks.
“We continue to make progress in building our corporate M&A business while staying focused on our historical areas of strength in sponsor-led activity. The new issue market remains resilient. We continue to be optimistic about the second half of 2026, given the strength of our current backlog and new business bookings,” Handler and Friedman said.
Among notable deals announced during the quarter, Jefferies advised India’s Sun Pharmaceutical on its USD 11.75 billion acquisition of American drugmaker Organon.