Founded more than 40 years ago, Jefferies (NYSE:JEF) focused on trading services for institutions. However, five years ago, the firm realized that the trading business would quickly erode because of intense competition and decimalization.

The new strategy was to focus on investment banking, such as providing advisory services for private placements, debt offerings, IPOs, and M&A.

So far, it looks like the change is paying off. Yesterday, the company reported its fourth-quarter results. In fact, the company demonstrated "all-time" records for quarterly total revenues ($343.9 million), quarterly net earnings ($36.7 million), and investment banking revenues ($117 million). In fairness, the recent growth in M&A has certainly resulted in a nice boost for the investment banking side of Jefferies.

During the quarter, revenues increased 13%, and net earnings increased 15%. But, of course, the biggest growth came from investment banking, which increased 29%.

A key part of the growth strategy for Jefferies has been to purchase investment banks. From 2002 to 2003, the company purchased Broadview, which focuses on tech M&A, and Quarterdeck Investment Partners, which focuses on defense and aerospace.

History has shown that buying an investment bank is no easy feat. If the cultures do not mesh, the bankers may leave. This happened when money center banks -- such as JPMorganChase (NYSE:JPM) and Citigroup (NYSE:C) -- purchased investment banks.

But Jefferies has been able to deal with the thorny issues. In fact, a few months ago, the company purchased Randall & Dewey, an M&A firm that specializes on oil and gas. The company will be a division of Jefferies and keep its name, which is a strong brand in the industry.

The deal appears to be based on the successful model of the Broadview and Quarterdeck transactions. What's more, with the surge in oil prices, I think the likelihood of consolidation in the oil and gas market looks particularly strong.

Why? There's been a recent falloff, but oil prices remain fairly high. With relatively high prices for oil, companies may find it easier to buy reserves instead of explore for them. I see them drilling for oil on Wall Street. And for Jefferies, it will be a way to keep its growth moving forward.

Fool contributor Tom Taulli does not own shares in the companies mentioned in this article.