Think of Jefferies (NYSE:JEF) as the Goldman Sachs (NYSE:GS) of the middle market, excelling among firms with revenues roughly between $100 million and $500 million. Over the past few years, Jefferies has built a strong platform to cater to this growing market as it arranges equity and debt financings, advises on mergers and acquisitions, and provides money management services.

Despite the complexities of its business, Jefferies has posted consistently strong growth. Yet on the latest earnings call, CEO Richard B. Handler made a rare declaration, calling the company's current environment "challenging," "unfavorable," and "volatile."

But Jefferies continues to grow. In the second quarter, net revenues increased 18% to $327 million. Unfortunately, analysts expected a more ambitious target: $348.4 million.

Net income also fell short of expectations. In the second quarter, net income was $45.6 million, or $0.32 per share, which compares to net income of $35.4 million, or $0.26 per share in the year-ago period. The Street pegged earnings per share at $0.33.

Jefferies' management has doubtlessly proven its ability to make smart strategic decisions. During the tech wreck of 2001-2003, the company purchased several high-tech investment banks, including Broadview International LLC and Quarterdeck Investment Partners. Its most prescient move may have been its purchase of Randall & Dewey, an investment bank focused on the energy sector. Surging oil prices have fueled a wave of consolidation in the energy business, driving a resulting need for experienced financial advisors.

Jefferies also has a strategic alliance with MassMutual (NYSE:MCI), giving it access to the other firm's considerable number of middle-market clients.

Recently, Jefferies has been building up its equity derivatives group. Its hires include Jason Glover, formerly a portfolio manager in the Emerging Managers Fund at Pequot Capital, and Mike George, a vice president at Goldman Sachs.

With overall volatility in the equities markets, derivatives have become more attractive to investors. Derivatives are complex products, using tricky investing vehicles such as options and futures to find better investment opportunities and protect portfolios from volatility.

True, the investment-banking business can be uneven for middle-market firms, as evidenced by companies like Thomas Weisel Partners Group (NASDAQ:TWPG). However, Jefferies is distinguished by the diversity of its platform. It also helps that its management has a clear knack for identifying growth opportunities -- especially when the economic climate gets a little rougher.

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