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Wall Street investment bank Jefferies Financial Group Inc. JEF-N hired away most of the senior members of rival Barclays PLC’s Toronto office on Wednesday, dramatically boosting its Canadian operations as part of a global expansion strategy.

The five Barclays dealmakers Jefferies recruited are a group that has ranked among the country’s top advisers on takeovers and financings for clients in tech, telecom, energy, mining, financial services and private equity. Jefferies first opened an office in Canada in 2012, with staff focused on referring clients to bankers outside the country.

Jefferies, backed by Sumitomo Mitsui Financial Group Inc. SMFG-N, one of Japan’s largest banks, is recruiting during a slowdown in merger, acquisition and financing activity. Many dealers are laying off staff, and several large lenders, including Credit Suisse CSGKF and Silicon Valley Bank, have gone out of business.

Among the recruits is Bruce Rothney, former chair and chief executive officer at Barclays Canada, who will now lead the Jefferies Canadian team. Mr. Rothney previously held senior roles at Royal Bank of Canada and Goldman Sachs Group Inc., and advised Rogers Communications Inc. on its recent acquisition of Shaw Communications Inc.

Jefferies also hired Barclays’ former head of mergers and acquisitions, Trond Lossius, who previously worked at Bank of Montreal; and James McKenna, who was head of Barclays’ diversified industries team, and before that was a tech and telecom banker at RBC. Two other senior Barclays bankers are also expected to join Jefferies, but are still in talks with their current employer.

Jefferies declined to comment on the moves. The investment bankers are expected to take several weeks of what is known on Bay Street as “gardening leave” before starting their new jobs, to avoid possible conflicts of interest.

A number of executives have departed London-based Barclays since the bank appointed new leadership at its U.S. arm in January. Several Barclays veterans – including former global head of investment banking John Miller – now have leadership roles at Jefferies.

Jefferies, founded in 1962 by Boyd Jefferies, who initially worked from a phone booth at the Pacific Coast Stock Exchange, traces its roots to trading stocks and junk bonds. The bank has grown dramatically over the past decade in the U.S. and Europe by poaching experienced financiers from rivals and building expertise in mergers and acquisitions, private equity and high growth sectors such as tech and health care.

In June, when Jefferies reported its most recent financial results, its chief executive officer, Richard Handler, said in a news release that changes at the bank’s primary competitors “are creating further market opportunity for our Jefferies platform and allowing us to recruit talent.”

Jefferies’ goal in Canada is to win roughly the same market share the bank has built in the U.S., according to two sources familiar with the bank’s strategy. The Globe and Mail is not naming the sources because they were not authorized to speak publicly.

Statistics from data service Dealogic show that Jefferies ranks fifth among investment banks for total fees from U.S. transactions in the year to date, with a 3.6-per-cent share. Barclays came in ninth. (J.P. Morgan Chase ranks first, with 10.3 per cent.)

In Canada, Dealogic’s data show Barclays ranks fifth – tops among banks based in foreign countries – while Jefferies doesn’t crack the top 20 dealers.

Jefferies is a public company, listed on the New York Stock Exchange, with a US$7.9-billion market capitalization. In 2021, Jefferies struck an alliance with Sumitomo. The Tokyo-based bank committed US$3.4-billion to Jefferies in return for a stake of up to 15 per cent. A key element of the partnership is giving Jefferies’ customers access to loans from Sumitomo, while the Japanese bank’s clients get advice on deals from Jefferies.

Barclays has been operating in Canada since 1929 – former prime minister Robert Borden and former federal finance minister Michael Wilson both worked at the bank – and it continues to have a significant presence in Toronto.

In an e-mail, Barclays spokesperson Andrew Smith said the bank “has successfully operated in Canada for close to a century, and we remain committed to Canada, to supporting our clients, and will continue to invest in talent and opportunities there.”

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 19/04/24 7:00pm EDT.

SymbolName% changeLast
JEF-N
Jefferies Financial Group Inc
+1.57%42.17
SMFG-N
Sumitomo Mitsui Financial Group ADR
+0.27%11.17

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