(Reuters) -Jefferies Financial Group said on Tuesday it plans to reduce the size of its merchant banking portfolio as part of a restructuring aimed at focusing on its global investment banking business.
The plan includes spinning off its holdings in Vitesse Energy before the end of this year to create a new publicly traded oil and gas company which will list on the New York Stock Exchange.
The financial services company will also sell its wood and lumber products business, Idaho Timber, in two deals for a combined $239 million.
Jefferies’ merchant banking portfolio, which includes investments in real estate, oil and gas, and public companies, was worth $1.6 billion at the end of May, according to a regulatory filing.
Revenue from investment banking and capital markets at Jefferies fell 31% in the three months ended May 31, mirroring that of Wall Street banks JPMorgan and Morgan Stanley after a record run in 2021, as geopolitical turmoil and fears of a looming recession have throttled dealmaking.
The company also aims to merge Jefferies Group, its investment banking arm headquartered in the United States, into the parent company by fiscal year-end 2022.
It also said Matt Larson, chief financial officer (CFO) of Jefferies Group, will take over as the CFO of the holding company after the merger. Larson will replace Teri Gendron after she leaves the company next year.
Conglomerate Leucadia renamed itself Jefferies in 2018 after it shed non-financial assets. (https://reut.rs/3ziGS8u)
(Reporting by Mehnaz Yasmin and Manya Saini in Bengaluru;Editing by Vinay Dwivedi)