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Investments
 12 Months Ended
Nov. 30, 2021
Equity Method Investments and Joint Ventures [Abstract]  
Investments Investments
At November 30, 2021, we had investments in JFIN Parent LLC (“Jefferies Finance”) and Berkadia. In August 2021, Jefferies Finance LLC’s corporate structure was reorganized and its outstanding debt was refinanced. As a result, we now hold an equity interest in JFIN Parent LLC and Jefferies Finance LLC is a direct subsidiary of JFIN Parent LLC. In addition, we had an investment in Epic Gas Ltd. (“Epic Gas”), which was sold on March 19, 2019. Our investments in Jefferies Finance, Berkadia and Epic Gas have been accounted for under the equity method and have been included in Loans to and investments in related parties in our Consolidated Statements of Financial Condition with our share of the investees’ earnings recognized in Other revenues in our Consolidated Statements of Earnings. We have limited partnership interests of 11% and 50% in Jefferies Capital Partners V L.P. and the Jefferies SBI USA Fund L.P. (together, “JCP Fund V”), respectively, which are private equity funds managed by a team led by one of our directors and our Chairman of the Executive Committee.
Jefferies Finance
Jefferies Finance, our 50/50 joint venture entity pursuant to an agreement with Massachusetts Mutual Life Insurance Company (“MassMutual”), is a commercial finance company that structures, underwrites and syndicates primarily senior secured loans to corporate borrowers; and manages proprietary and third-party investments for both broadly syndicated and direct lending loans. Jefferies Finance conducts its operations primarily through two business lines, Leveraged Finance Arrangement and Portfolio and Asset Management. Loans are originated primarily through our investment banking efforts and Jefferies Finance typically syndicates to third-party investors substantially all of its arranged volume through us. The Portfolio and Asset Management business lines, collectively referred to as Jefferies Credit Partners, manages a broad portfolio of assets under management comprised of portions of loans it has arranged, as well as loan positions that it has purchased in the primary and secondary markets. Jefferies Credit Partners is comprised of three registered Investment Advisors: Jefferies Finance, Apex Credit Partners LLC and JFIN Asset Management LLC, which serve as a private credit platform managing proprietary and third-party capital across commingled funds, separately managed accounts and CLOs.
At November 30, 2021, we and MassMutual each had equity commitments to Jefferies Finance of $750.0 million, for a combined total commitment of $1.5 billion. The equity commitment is reduced quarterly based on our share of any undistributed earnings from Jefferies Finance and the commitment is increased only to the extent the share of such earnings are distributed. At November 30, 2021, our remaining commitment to Jefferies Finance was $42.6 million. The investment commitment is scheduled to expire on March 1, 2022 with automatic one year extensions absent a 60 days termination notice by either party.
Jefferies Finance has executed a Secured Revolving Credit Facility with us and MassMutual, to be funded equally, to support loan underwritings by Jefferies Finance, which bears interest based on the interest rates of the related Jefferies Finance underwritten loans and is secured by the underlying loans funded by the proceeds of the facility. The total Secured Revolving Credit Facility is a committed amount of $500.0 million at November 30, 2021. Advances are shared equally between us and MassMutual. The facility is scheduled to mature on March 1, 2022 with automatic one year extensions absent a 60 days termination notice by either party. At November 30, 2021, we had funded $0.0 million of our $250.0 million commitment. The following summarizes the activity included in our Consolidated Statements of Earnings related to the facility (in millions):
Year Ended November 30,
202120202019
Interest income$1.5 $2.4 $— 
Unfunded commitment fees1.2 1.1 1.3 
The following is a summary of selected financial information for Jefferies Finance (in millions):
November 30,
20212020
Total assets
$8,258.7 $7,199.5 
Total liabilities
6,843.9 5,990.4 
Total equity
1,414.8 1,209.1 
Our total equity balance
707.4 604.6 
Year Ended November 30,
202120202019
Net earnings (loss)$205.7 $(74.9)$44.5 
The following summarizes activity related to our other transactions with Jefferies Finance (in millions):
Year Ended November 30,
202120202019
Origination and syndication fee revenues (1)$410.5 $198.1 $176.3 
Origination fee expenses (1)66.8 27.3 27.6 
CLO placement fee revenues (2)5.7 1.7 6.0 
Underwriting fees (3)2.5 1.7 3.9 
Service fees (4)85.1 65.1 60.8 
(1)We engage in the origination and syndication of loans underwritten by Jefferies Finance. In connection with such services, we earned fees, which are recognized in Investment banking revenues in our Consolidated Statements of Earnings. In addition, we paid fees to Jefferies Finance in respect of certain loans originated by Jefferies Finance, which are recognized as Business development expenses in our Consolidated Statements of Earnings.
(2)We act as a placement agent for CLOs managed by Jefferies Finance, for which we recognized fees, which are included in Investment banking revenues in our Consolidated Statements of Earnings. At November 30, 2021 and 2020, we held securities issued by CLOs managed by Jefferies Finance, which are included in Financial instruments owned, at fair value.
(3)We acted as underwriter in connection with term loans issued by Jefferies Finance.
(4)Under a service agreement, we charge Jefferies Finance for services provided.
In connection with non-U.S. dollar loans originated by Jefferies Finance to borrowers who are investment banking clients of ours, we have entered into an agreement to indemnify Jefferies Finance with respect to any foreign currency exposure.
Receivables from Jefferies Finance, included in Other assets in our Consolidated Statements of Financial Condition, were $26.2 million and $24.2 million at November 30, 2021 and 2020, respectively. At November 30, 2021, payables to Jefferies Finance, related to cash deposited with us and included in Payables to customers in our Consolidated Statements of Financial Condition, was $8.5 million. At November 30, 2020, payables to Jefferies Finance, related to cash deposited with us and included in Accrued expenses and other liabilities in our Consolidated Statements of Financial Condition, were $13.7 million.
In 2019, we had a promissory note with Jefferies Finance with a principal amount of $1.0 billion, the proceeds of which were used in connection with our investment banking loan syndication activities. Interest paid on the note of $3.8 million is included in Interest expense within our Consolidated Statements of Earnings for the year ended November 20, 2019.
Berkadia
Berkadia is a commercial mortgage banking and servicing joint venture that was formed in 2009 by Jefferies and Berkshire Hathaway Inc. On October 1, 2018, Jefferies transferred its 50% voting equity interest in Berkadia and related arrangements to us. As a result, we are entitled to receive 45% of the profits of Berkadia. Berkadia originates commercial/multifamily real estate loans that are sold to U.S. government agencies or other investors. Berkadia also is an investment sales advisor focused on the multifamily industry. Berkadia is a servicer of commercial real estate loans in the U.S., performing primary, master and special servicing functions for U.S. government agency programs, commercial mortgage-backed securities transactions, banks, insurance companies and other financial institutions.
The following is a summary of selected financial information for Berkadia (in millions):
November 30,
20212020
Total assets$4,630.7 $4,294.0 
Total liabilities3,377.0 3,626.3 
Total equity1,253.7 667.7 
Our total equity balance373.4 301.2 
Year Ended November 30,
202120202019
Net earnings$290.3 $153.1 $195.9 
We received distributions from Berkadia on our equity interest as follows (in millions):
Year Ended November 30,
202120202019
Distributions$58.0 $37.1 $65.0 
At November 30, 2021 and 2020, we had commitments to purchase $425.6 million and $401.0 million, respectively, of agency CMBS from Berkadia.
JCP Fund V
The amount of our investments in JCP Fund V included in Financial instruments owned, at fair value in our Consolidated Statements of Financial Condition was $25.4 million and $17.4 million at November 30, 2021 and 2020, respectively. We account for these investments at fair value based on the NAV of the funds provided by the fund managers (see Note 2, Summary of Significant Accounting Policies, herein). The following summarizes the results from these investments which are included in Principal transactions revenues in our Consolidated Statements of Earnings (in millions):
Year Ended November 30,
202120202019
Net gains (losses) from our investments in JCP Fund V$7.7 $(3.0)$(5.7)
At both November 30, 2021 and 2020, we were committed to invest equity of up to $85.0 million in JCP Fund V. At November 30, 2021 and 2020, our unfunded commitment relating to JCP Fund V was $8.7 million and $9.1 million, respectively.
The following is a summary of selected financial information for 100.0% of JCP Fund V, in which we owned effectively 35.2% of the combined equity interests (in thousands):
September 30,
2021 (1)2020 (1)
Total assets
$72,184 $49,404 
Total liabilities
80 84 
Total partners’ capital
72,104 49,319 
Nine Months Ended September 30, 2021 (1)Three Months Ended December 31, 2020 (1)Nine Months Ended September 30, 2020 (1)Three Months Ended December 31, 2019 (1)Nine Months Ended September 30, 2019 (1)Three Months Ended December 31, 2018 (1)
Net increase (decrease) in net assets resulting from operations
$23,809 $(1,024)$(12,456)$(1,397)$(19,070)$(8,412)
(1)Financial information for JCP Fund V in financial position and results of operations at November 30, 2021 and 2020 and for the years ended November 30, 2021, 2020 and 2019 is included based on the presented periods.
Epic Gas
We had an investment in Epic Gas and during the year ended November 30, 2019, we sold all of our common shares of Epic Gas, at fair value, for a total of $24.6 million. There was a gain of $2.8 million on this transaction, which is included in Other revenue in our Consolidated Statements of Earnings for the year ended November 30, 2019. Epic Gas reported net gains of $0.9 million in the period we held the investment during the year ended November 30, 2019.