"Jefferies Considers Launching Brokerage Business in Brazil Market"

02 Aug, 2024

"Jefferies Considers Launching Brokerage Business in Brazil Market"

Jefferies Financial Group Inc. (JEF) is considering expanding its operations in Brazil by launching a brokerage business. Having established its first office in Brazil last year, Jefferies plans to increase staff and enhance its local presence. Alejandro Guevara, Jefferies' senior country officer for Brazil, mentioned that client demand prompted the company's interest in Brazil, and they are pleased with their progress since April.

The expansion plan involves adding another managing director to the 10-member investment banking team in Brazil, focusing on M&A advisory and capital markets services, including international equity and debt offerings. Jefferies is also contemplating the formation of a local debt capital markets team to support dollar-denominated global bond transactions.

Despite a challenging environment in Brazil, characterized by high interest rates and currency volatility, Jefferies aims to grow its footprint. Equity issuance in Brazil has decreased by 13% this year, with no initial public offerings since December 2021. Jefferies covers 44 Brazilian companies and 113 Latin American firms, following its acquisition of Nau Securities.

Additionally, Jefferies is collaborating with Sumitomo Mitsui Financial Group (SMFG) to offer credit products in Brazil. SMFG plans to increase its stake in Jefferies, enhancing their strategic alliance. This expansion aligns with Jefferies' global growth strategy, which includes deepening its relationship with SMBC and investing in Ameriprise Financial’s Columbia Threadneedle Investments.