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Related Party Transactions

12 Months Ended

Nov. 30, 2020

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

•At November 30, 2020 and 2019, we had $28.9 million and $34.8 million, respectively, of loans outstanding to certain of our officers and employees (none of whom are executive officers or directors) that are included in Other assets in our Consolidated Statements of Financial Condition.

•In June 2020, we sold an investment in a limited partnership to one of our employees for $0.5 million.

•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.

•One of our directors had an investment in a hedge fund managed by us of approximately $0.8 million at November 30, 2020. One of our directors also had an investment in a hedge fund managed by us of approximately $3.6 million at November 30, 2019, which was fully redeemed in May 2020 due to the wind down of an asset management platform.

See Note 8, Variable Interest Entities, and Note 18, Commitments, Contingencies and Guarantees, for further information regarding related party transactions with our officers, directors and employees.

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

•We provide services to and receive services from Jefferies under service agreements (in millions):


	Year Ended November 30,
	2020		2019		2018
Charges to Jefferies for services provided	$	47.2	$	52.7	$	61.2
Charges from Jefferies for services received	32.2		9.5		9.1

•We provide investment banking and capital markets and asset management services to Jefferies and its affiliates. The following table presents the revenues earned by type of services provided (in millions):


	Year Ended November 30,
	2020		2019		2018
Investment banking	$	10.5	$	10.6	$	15.7

Commissions and other fees	1.5		1.2		1.8
Principal transactions	—		—		0.1

•Receivables from and payables to Jefferies, included in Other assets and Accrued expenses and other liabilities, respectively, in our Consolidated Statements of Financial Condition:


	Year Ended November 30,
	2020		2019
Receivable from Jefferies	$	1.3	$	0.9
Payable to Jefferies	7.1		4.3

•During the years ended November 30, 2020 and 2019, we paid distributions of $498.7 million and $311.1 million, respectively, to Jefferies. At November 30, 2020 and 2019, we accrued distributions payable in the amount of $153.6 million and $12.6 million, respectively, which are included in Accrued expenses and other liabilities, in our Consolidated Statements of Financial Condition, based on our results for the three months ended November 30, 2020 and 2019.

•Pursuant to a tax sharing agreement entered into between us and Jefferies, payments are made between us and Jefferies to settle current tax receivables and payables. At November 30, 2020, a net current tax payable from Jefferies of $111.1 million is included in Accrued expenses and other liabilities, in our Consolidated Statements of Financial Condition. At November 30, 2019, a net current tax receivable from Jefferies of $24.4 million is included in Other assets, in our Consolidated Statements of Financial Condition. During the years ended November 30, 2020 and 2019, we made payments to Jefferies of $83.0 million and $71.4 million, respectively.

•We purchase securities from and sell securities to Jefferies, at fair value (in millions). There were no gains or losses on these transactions.


	Year Ended November 30,
	2020		2019
Securities purchased from Jefferies	$	64.8	$	917.2
Securities sold to Jefferies (1)	0.1		110.9

(1)During the year ended November 30, 2019, we also transferred to Jefferies a related deferred tax liability of $3.1 million.

•On November 3, 2020, Jefferies sold a wholly-owned subsidiary primarily invested in short-dated receivables that related to an asset management strategy to an investment fund managed by us for approximately $180.7 million.

•At November 30, 2020, we have customer account payables to entities of Jefferies totaling $2.2 million, included in Payables—customers, in our Consolidated Statements of Financial Condition.

•On November 27, 2019, we transferred our investment in CoreCommodity Capital, LLC, an asset manager, along with a related accrued receivable and deferred tax asset, to Jefferies, in return for a total cash payment of $31.0 million.

•On October 1, 2018, Jefferies transferred its 50% interest in Berkadia and capital investments in certain separately managed accounts and funds to us. On November 1, 2018, we purchased LIML, an investment advisory company, from Jefferies. These transfers were accomplished as a capital contribution from Jefferies of approximately $598.2 million and cash payments of $70.5 million to Jefferies during the fourth quarter of 2018. In addition, we paid cash of approximately $5.5 million, representing LIML’s net book value as at October 31, 2018, including goodwill of $0.4 million and intangible assets of $0.2 million. In connection with these transfers, related deferred tax liabilities of approximately $50.9 million were transferred to us, for which Jefferies has indemnified us. These transferred deferred tax liabilities were adjusted by an additional $19.1 million during the fourth quarter of 2019. See Note 9, Investments, for further details on our 50% interest in Berkadia.

•In connection with foreign exchange contracts entered into under a prime brokerage agreement with an affiliate of Jefferies, we have $2.7 million and $9.9 million at November 30, 2020 and 2019, respectively, included in Payables—brokers, dealers and clearing organizations, in our Consolidated Statements of Financial Condition.

•We enter into OTC foreign exchange contracts with a subsidiary of Jefferies. In connection with these contracts, we had $0.1 million recorded in Financial instruments owned, at fair value, and $0.6 million recorded in Financial instruments sold, not yet purchased, at fair value, in our Consolidated Statements of Financial Condition at November 30, 2020 and 2019, respectively. Net gains (losses) relating to these contracts, which are included in Principal transactions revenues in our Consolidated Statements of Earnings, are as follows (in millions):


	Year Ended November 30,
	2020		2019		2018
Net gains (losses) on foreign exchange contracts	$	1.6	$	(6.1)	$	—

•Two of our directors have investments totaling $0.4 million at November 30, 2019 in a hedge fund managed by Jefferies. In December 2019, both directors fully redeemed their interests in this fund.

•We have investments in hedge funds managed by Jefferies of $239.0 million and $223.5 million at November 30, 2020 and 2019, respectively, included in Financial instruments owned, at fair value in our Consolidated Statements of Financial Condition. Net gains on our investments in these hedge funds, which are included in Principal transactions revenues in our Consolidated Statements of Earnings, are as follows (in millions):


	Year Ended November 30,
	2020		2019		2018
Net gains on our investments	$	15.8	$	4.7	$	5.0

•In connection with our capital markets activities, from time to time we make a market in long-term debt securities of Jefferies (i.e., we buy and sell debt securities issued by Jefferies). At November 30, 2020 and 2019, approximately $2.6 million and $0.1 million, respectively, of debt issued by Jefferies is included in Financial instruments owned, at fair value in our Consolidated Statements of Financial Condition.

•We have entered into a sublease agreement with an affiliate of Jefferies for office space. For the year ended November 30, 2020, we received payments for rent and other expenses of $0.8 million from this affiliate.

•In June 2020, Jefferies paid us $2.9 million for the transfer of one of its asset management divisions, which included a net related liability to us.

HRG Group Inc. (“HRG”). We recognized investment banking revenues of $3.0 million for the year ended November 30, 2018 in connection with the merger of HRG into Spectrum Brands Holdings, Inc., which was partially owned by Jefferies.

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