Jefferies Abandons Plan to Raise $1B Fund — Report

Jefferies Financial Group, Inc. (NYSE: JEF) has shelved its plan to raise a $1 billion fund to acquire stakes in private equity fund managers, Reuters said in a report, citing people familiar with the matter.

The decision impacts Jefferies’ Leucadia Asset Management division, which partnered with New York-based equity firm Stonyrock Partners in 2019 to raise the fund to invest in private equity fund managers.

As of April 2021, the fund, Stonyrock Alt Fund I, had raised only $38 million of the $1 billion it was seeking, a regulatory filing said.

About Jefferies

New York-based financial services firm Jefferies offers asset management, investment banking, merchant banking, corporate banking and capital markets services.

The company’s Leucadia Asset Management unit provides alternative investment products. The division’s net revenues declined 52% to $43 million during the three months ended November 2021.

Wall Street’s Take

Following the release of Jefferies’ fourth-quarter financial results last week, Morgan Stanley (NYSE: MS) analyst Manan Gosalia reiterated a Hold rating on the stock with a price target of $40 (6.3% upside potential).

Overall, the stock has a Hold consensus rating based on 1 Buy and 3 Holds. The average Jefferies Financial Group stock forecast of $47.25 implies 25.6% upside potential. Shares have gained 49.6% over the past year.

Risk Analysis

According to TipRanks’ Risk Factors tool, Jefferies is at risk mainly from one factor: Finance & Corporate, which accounts for 44% of the total 34 risks identified for the stock. Under the Finance & Corporate risk category, the company has 15 risks, details of which can be found on the TipRanks website.

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