Middle-market investment bank Jefferies
Despite the tough times, Jefferies was able to survive and capitalize on the situation. Among other efforts, it made several key acquisitions, including Broadview International LLC, an investment bank focusing on the technology sector. The moves are definitely paying off, as evidenced by the fourth-quarter results Jefferies reported this week. Revenues increased 33% to $431.7 million, while net income rose 32%, to $46.7 million.
The key to Jefferies' growth is its investment banking division. During the fourth quarter, revenues surged 58% to $167.5 million, mostly on the strength of mergers and acquisitions. That sort of activity is cyclical, but all indicators point to a very strong 2006.
Jefferies' investment-banking performance won it the "Middle Market Investment Bank of the Year" award from the Investment Dealer's Digest magazine. Nonetheless, it's attempting to expand its offerings. For example, MassMutual
Nonetheless, Jefferies will rely heavily on investment banking for the next few years. But with the continued surge in M&A, that's looking like an enviable place to be.
Fool contributor Tom Taulli does not own shares of companies mentioned in this article.