Related Party Transactions

Jefferies Capital Partners Related Funds. We have equity investments in the JCP Manager and in private equity funds which are managed by a team led by Brian P. Friedman, one of our directors and our Chairman of the Executive Committee (“Private Equity Related Funds”). At May 31, 2017 and November 30, 2016, our equity investments in Private Equity Related Funds were in aggregate $28.0 million and $37.7 million, respectively. We also charge the JCP Manager for certain services under a service agreement. The following table presents revenues and service charges related to our investment in Private Equity Related Funds (in thousands):



	Three Months Ended May 31,						Six Months Ended May 31,
	2017			2016			2017			2016
Other revenues and investment income (loss)	$	(8,122	)	$	(5,064	)	$	(9,420	)	$	(7,712	)
Service charges	198			207			323			336

For further information regarding our commitments and funded amounts to the Private Equity Related Funds, see Note 15, Commitments, Contingencies and Guarantees.

Berkadia Commercial Mortgage, LLC. At May 31, 2017 and November 30, 2016, we have commitments to purchase $797.4 million and $817.0 million, respectively, in agency CMBS from Berkadia Commercial Mortgage, LLC, which is partially owned by Leucadia.

Officers, Directors and Employees. The following sets forth information regarding related party transactions with our officers, directors and employees:


•	At May 31, 2017 and November 30, 2016, we had $47.0 million and $38.4 million, respectively, of loans outstanding to certain of our employees (none of whom are executive officers or directors) that are included in Other assets in our Consolidated Statements of Financial Condition.


•	Receivables from and payables to customers include balances arising from officers, directors and employees individual security transactions. These transactions are subject to the same regulations as all customer transactions and are provided on substantially the same terms.


•	At November 30, 2016, we had provided a guarantee of a credit agreement for a private equity fund owned by our employees and in April 2017 this guarantee was terminated.


•	One of our directors has investments in a hedge fund managed by us of approximately $5.0 million at both May 31, 2017 and November 30, 2016.

See Note 8, Variable Interest Entities, and Note 15, Commitments, Contingencies and Guarantees, for further information regarding related party transactions with our officers, directors and employees.

Leucadia. The following is a description of related party transactions with Leucadia and its affiliates:

•

Under a service agreement, we charge Leucadia for certain services, which amounted to $6.8 million and $12.9 million for the three and six months ended May 31, 2017, respectively, and $6.9 million and $14.5 million for the three and six months ended May 31, 2016, respectively. At May 31, 2017 and November 30, 2016, we had a receivable from Leucadia of $2.2 million and $2.8 million, respectively, which is included in Other assets in our Consolidated Statements of Financial Condition. At May 31, 2017 and November 30, 2016, we had a payable to Leucadia of $4.5 million and $1.9 million, respectively, related to certain services provided by Leucadia, which is included in Accrued Expenses and other liabilities in our Consolidated Statements of Financial Condition.


•	Pursuant to a tax sharing agreement entered into between us and Leucadia, payments are made between us and Leucadia to settle current tax assets and liabilities. At May 31, 2017 and November 30, 2016, a net current tax receivable from Leucadia of $33.4 million and $80.1 million, respectively, is included in Other assets in our Consolidated Statements of Financial Condition.

•

In March 2016, we made a capital contribution of $114.0 million to a hedge fund managed by a subsidiary of Leucadia and in December 2016, we made a capital redemption of $17.0 million from this hedge fund. Net gains on our investment in this hedge fund were $1.4 million and $3.2 million for the three and six months ended May 31, 2017, respectively, and $0.9 million for both the three and six months ended May 31, 2016, which are included in Principal Transactions in our Consolidated Statements of Earnings.


•	In April 2017, we sold securities to Leucadia at a fair value of $21.9 million for cash, in connection with the transfer of certain trading activity to Leucadia. In February 2017, we sold securities to Leucadia at a fair value of $25.6 million for cash. There was no gain or loss on the transaction.


•	We received $1.8 million of investment banking and advisory fees for both the three and six months ended May 31, 2016.


•	We received $29,000 and $0.1 million of asset management fees for the three and six months ended May 31, 2016, respectively.

•

In connection with our sales and trading activities, from time to time we make a market in long-term debt securities of Leucadia (i.e., we buy and sell debt securities issued by Leucadia). At May 31, 2017 and November 30, 2016, approximately $2.6 million and $1.0 million, respectively, of debt securities issued by Leucadia are included in Financial instruments owned in our Consolidated Statements of Financial Condition.

For information on transactions with our equity method investees, see Note 9, Investments.