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Investments
 6 Months Ended
May 31, 2023
Equity Method Investments and Joint Ventures [Abstract]  
Investments Investments
Investments for which we exercise significant influence over the investee accounted for under the equity method of accounting with our shares of the investees’ earnings recognized in Other revenues in our Consolidated Statements of Earnings. Equity method investments, including any loans to the investees, are reported within Investments in and loans to related parties in our Consolidated Statements of Financial Condition are summarized as follows (in millions).
May 31, 2023November 30, 2022
Total Investments in and loans to related parties$1,412.5 $1,426.8 

Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Total equity method pickup earnings (losses) recognized in Other revenues in our Consolidated Statements of Earnings $(87.8)$16.1 $(151.8)$49.8 
The following presents summarized financial information about our significant equity method investees. For certain investees, we receive financial information at a lag and the summarized information provided for these investees is based on the latest financial information available as of May 31, 2023, November 30, 2022 and May 31, 2022.
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 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. Jefferies Finance may also underwrite and arrange other debt products such as second lien term, bridge and mezzanine loans, as well as related equity co-investments. The Asset Management business, collectively referred to as Jefferies Credit Partners, LLC, manages a broad portfolio of assets under management composed 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 composed of three registered Investment Advisors: Jefferies Finance, Apex Credit Partners LLC and Jefferies Credit Partners LLC, which serve as a private credit platform managing proprietary and third-party capital across commingled funds, separately managed accounts and CLOs.
At May 31, 2023, we and MassMutual each had equity commitments to Jefferies Finance of $750.0 million, for a combined total commitment of $1.50 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 May 31, 2023, our remaining commitment to Jefferies Finance was $15.4 million. The investment commitment is scheduled to expire on March 1, 2024 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 May 31, 2023. Advances are shared equally between us and MassMutual. The facility is scheduled to mature on March 1, 2024 with automatic one year extensions absent a 60 days termination notice by either party. At May 31, 2023, we had funded $0.0 million of our $250.0 million commitment. The following summarizes the activity included in our Consolidated Statements of Earnings related to the facility (in millions):
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Interest income$— $0.3 $— $0.4 
Unfunded commitment fees0.3 0.3 0.6 0.6 
The following is a summary of selected financial information for Jefferies Finance (in millions):
May 31, 2023November 30, 2022
Total assets$6,529.7 $6,773.2 
Total liabilities5,218.8 5,500.4 
May 31, 2023November 30, 2022
Our total equity balance$650.1 $636.4 
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Net earnings (losses)$12.9 $(9.1)$27.8 $48.4 
The following summarizes activity related to our other transactions with Jefferies Finance (in millions):
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Origination and syndication fee revenues (1)$20.2 $41.9 $46.2 $156.8 
Origination fee expenses (1)6.3 11.4 10.4 27.3 
CLO placement fee revenues (2)— 1.2 — 1.9 
Service fees (3)16.9 15.8 61.1 65.8 
(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 May 31, 2023 and November 30, 2022, we held securities issued by CLOs managed by Jefferies Finance, which are included in Financial instruments owned, at fair value in our Consolidated Statements of Financial Condition.
(3)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 $6.2 million and $1.2 million at May 31, 2023 and November 30, 2022, respectively. At May 31, 2023 and November 30, 2022, payables to Jefferies Finance, related to cash deposited with us and included in Payables to customers in our Consolidated Statements of Financial Condition, were $10.2 million and $0.5 million, respectively.
Berkadia
Berkadia is a commercial mortgage banking, servicing and finance joint venture that was formed by us and Berkshire Hathaway Inc. We are entitled to receive 44.4% 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.
Commercial paper issued by Berkadia is supported by a $1.50 billion surety policy issued by a Berkshire Hathaway insurance subsidiary and corporate guaranty, and we have agreed to reimburse Berkshire Hathaway for one-half of any losses incurred thereunder. At May 31, 2023, the aggregate amount of commercial paper outstanding was $1.47 billion.
The following is a summary of selected financial information for Berkadia (in millions):
May 31, 2023November 30, 2022
Total assets$4,524.6 $4,436.0 
Total liabilities2,729.1 2,801.7 
Total noncontrolling interest854.9 690.1 
May 31, 2023November 30, 2022
Our total equity balance$424.9 $425.9 
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Net earnings$13.5 $85.8 $42.5 $172.2 
At May 31, 2023 and November 30, 2022, we had commitments to purchase $144.0 million and $237.4 million, respectively, of agency CMBS from Berkadia.
OpNet
We own approximately 47.4% of the common shares and 50.0% of the voting rights of OpNet. We recognized equity method pickup losses of $83.0 million and $121.8 million during the three and six months ending May 31, 2023, respectively, and $14.5 million and $29.3 million during the three and six months ending May 31, 2022, respectively in Other revenues.
In addition to common stock, we own various classes of convertible preferred stock with a carrying value of $0.4 million and $0.0 million at May 31, 2023 and November 30, 2022, respectively. During the three and six months ending May 31, 2023, we contributed $23.4 million and $82.9 million, respectively, to OpNet through direct subscription, settlement of subscription advances, and conversion of a shareholder loan. The convertible preferred stock is automatically convertible to common shares in 2026. We also hold common stock warrants, which are exercisable by June 2024 and June 2027 and received warrants in January 2023 to acquire the new class of preferred stock, which are exercisable by December 23, 2027. The common stock warrants and preferred stock warrants are reported in Financial instruments owned, at fair value in our Consolidated Statements of Financial Condition and had a fair value of $85.2 million and $54.2 million at May 31, 2023 and November 30, 2022, respectively.
If our convertible preferred stock and common stock warrants were all converted or exercised, our ownership would increase to approximately 71.8% of OpNet’s common equity and voting rights.
We also own redeemable preferred stock and subordinated bonds issued by OpNet. The redeemable preferred stock is reported in Other assets in our Consolidated Statements of Financial Condition and had a carrying value of $0.0 million and $24.5 million at May 31, 2023 and November 30, 2022, respectively. The subordinated bonds are reported in Financial instruments owned, at fair value in our Consolidated Statements of Condition with a fair value of $52.7 million and $48.6 million at May 31, 2023 and November 30, 2022, respectively.
We have outstanding shareholder loans to OpNet. The total carrying value of shareholder loans to OpNet was $46.3 million and $19.3 million at May 31, 2023 and November 30, 2022, respectively. On June 26, 2023, we made an additional shareholder loan of $15.6 million to OpNet.
We have agreed to provide additional financial support, if necessary, to meet certain funding needs of OpNet through June 2024.
As a result of a reconsideration event occurring during the three months ended February 28, 2023, upon the issuance of the new class of convertible preferred stock, OpNet was determined to be a VIE.
The following is a summary of selected financial information for OpNet (in millions):
May 31, 2023November 30, 2022
Total assets$1,054.5 $1,050.8 
Total liabilities996.1 935.2 
May 31, 2023November 30, 2022
Our total equity balance$— $— 
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Net losses$(90.4)$(21.8)$(142.0)$(45.3)
FXCM
We have a 50.0% voting interest in FXCM, a provider of online foreign exchange trading services, and have the ability to significantly influence FXCM through our seats on the board of directors. During the three and six months ended May 31, 2023, we contributed additional capital of $5.0 million and $10.0 million, respectively. We also have a senior secured term loan to FXCM, which is reported within Financial instruments owned, at fair value in our Consolidated Statements of Financial Condition and had a fair value of $38.1 million and $35.1 million at May 31, 2023 and November 30, 2022, respectively. We are amortizing our basis difference between the estimated fair value and the underlying book value of FXCM customer relationships, technology and other assets over their respective useful lives (weighted average life of 4 years for amortizable assets). FXCM is considered a VIE and our term loan and equity interest are variable interests.
In March 2023, certain noteholders of Global Brokerage Inc. (“GLBR”) filed an involuntary bankruptcy petition against GLBR and its subsidiary, Global Brokerage Holdings LLC (“Holdings”), which holds a 50% voting equity interest in FXCM. In addition to all of FXCM’s assets being pledged as collateral to Jefferies in connection with the senior secured term loan, all of Holdings’ equity interest in FXCM is also pledged as collateral to Jefferies in connection with the senior secured term loan. Jefferies currently intends to seek to lift the automatic stay in the bankruptcy proceeding and to enforce its rights under the term loan, the controlling intercreditor agreement, and related contractual agreements among the parties. Jefferies believes that the successful enforcement of those rights will result in Jefferies owning 100% of FXCM.
The following is a summary of selected financial information for FXCM (in millions):
May 31, 2023November 30, 2022
Total assets
$360.3 $389.6 
Total liabilities
327.4 341.4 
May 31, 2023November 30, 2022
Our total equity balance
$46.6 $59.7 
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Net earnings (losses)$(5.4)$4.7 $(25.8)$(3.4)
In connection with foreign exchange contracts entered into with FXCM, we have $0.5 million at November 30, 2022, included in Payables—brokers, dealers and clearing organizations in our Consolidated Statements of Financial Condition.
Golden Queen Mining Company LLC
We have a 50.0% ownership interest in Golden Queen, which owns and operates a gold and silver mine project located in California. We also own warrants to purchase shares with a fair value of $0.0 million and $0.6 million at May 31, 2023 and November 30, 2022, respectively, which if exercised, would increase our ownership to approximately 51.9% of Golden Queen’s common equity. The warrants are reported in Financial instruments owned, at fair value in our Consolidated Statements of Financial Condition. We also have a shareholder loan to Golden Queen with a carrying value of $18.7 million and $14.0 million at May 31, 2023 and November 30, 2022, respectively. During the three and six months ended May 31, 2023, we recognized other-than-temporary impairment charges of $7.3 million and $29.4 million, respectively, on our investment within Other revenues in our Consolidated Statement of Earnings. The following is a summary of selected financial information for Golden Queen (in millions):
May 31, 2023November 30, 2022
Total assets
$219.9 $209.8 
Total liabilities
114.6 102.1 
May 31, 2023November 30, 2022
Our total equity balance$16.8 $46.5 
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Net losses$(1.4)$(3.0)$(2.3)$(7.6)
Real Estate Investments
Our real estate equity method investments primarily consist of equity interests in Brooklyn Renaissance Plaza and Hotel and 54 Madison. Brooklyn Renaissance Plaza is composed of a hotel, office building complex and parking garage located in Brooklyn, New York. We have a 25.4% equity interest in the hotel and a 61.3% equity interest in the office building and garage. Although we have a majority interest in the office building and garage, we do not have control, but only have the ability to exercise significant influence on this investment. We are amortizing our basis difference between the estimated fair value and the underlying book value of Brooklyn Renaissance office building and garage over the respective useful lives (weighted average life of 39 years).
We own a 48.1% equity interest in 54 Madison, a fund that most recently owned an interest in one real estate project and is in the process of being liquidated.
The following is a summary of selected financial information for our significant real estate investments (in millions):
May 31, 2023November 30, 2022
Total assets
$227.4 $350.4 
Total liabilities
400.4 487.5 
May 31, 2023November 30, 2022
Our total equity balance$92.9 $107.3 
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Net earnings (losses)
$(3.4)$(6.1)$(2.3)$0.5 
We received distributions from 54 Madison on our equity interest as follows (in millions):
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Distributions$— $0.2 $17.1 $0.2 
JCP Fund V
We have limited partnership interests of 11% and 50% in Jefferies Capital Partners V L.P. and Jefferies SBI USA Fund L.P. (together, “JCP Fund V”), respectively, which are private equity funds managed by a team led by our President. 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 $2.9 million and $23.9 million at May 31, 2023 and November 30, 2022, respectively. We account for these investments at fair value based on the NAV of the funds provided by the fund managers (see Note 2, Summary of Significant Accounting Policies, herein). The following summarizes the results from these investments which are included in Principal transactions revenues in our Consolidated Statements of Earnings (in millions):
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Net gains (losses) from our investments in JCP Fund V$(1.7)$2.3 $(8.3)$3.2 
At both May 31, 2023 and November 30, 2022, we were committed to invest equity of up to $85.0 million in JCP Fund V. At both May 31, 2023 and November 30, 2022, our unfunded commitment relating to JCP Fund V was $8.7 million.
The following is a summary of the Net change in net assets resulting from operations for 100.0% of JCP Fund V, in which we owned effectively 35.2% at May 31, 2023 of the combined equity interests (in thousands):
Three Months Ended
March 31,
2023		December 31,
2022		March 31,
2022		December 31,
2021
Net increase (decrease) in net assets resulting from operations (1)$(4,896)$(54,551)$7,534 $(3,159)
(1)Financial information for JCP Fund V within our results of operations for the three and six months ended May 31, 2023 and 2022 is included based on the presented periods.
Asset Management Investments
We have an investment with a carrying amount of $18.0 million and $18.6 million at May 31, 2023 and November 30, 2022, respectively, consisting of our shares in Monashee, an investment management company, registered investment advisor and general partner of various investment management funds, which provides us with a 50.0% voting rights interest and the rights to distributions of 47.5% of the annual net profits of Monashee’s operations if certain thresholds are met. A portion of the carrying amount of the investment in Monashee relates to contract and customer relationship and client relationship intangible assets and goodwill. The intangible assets are amortized over their useful life and the goodwill is not amortized.
We also have an investment management agreement whereby Monashee provides asset management services to us for certain separately managed accounts. Our net investment balance in the separately managed accounts was $19.7 million and $17.7 million at May 31, 2023 and November 30, 2022, respectively. The following table presents the activity included in our Consolidated Statements of Earnings related to these separately managed accounts (in millions):
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Investment losses (1)$(0.6)$(0.3)$(0.3)$(2.4)
Management fees (2)0.2 0.1 0.4 0.3 
(1)Included in Principal transactions revenues in our Consolidated Statements of Earnings.
(2)Included in Floor brokerage and clearing fees in our Consolidated Statements of Earnings.
ApiJect
We own shares which represent a 38% economic interest in ApiJect at May 31, 2023, which is accounted for at fair value by electing the fair value option available under U.S. GAAP and is included within corporate equity securities in Financial instruments owned, at fair value, in our Consolidated Statements of Financial Condition. Additionally, we have a right to 1.125% of ApiJect’s future revenues. At both May 31, 2023 and November 30, 2022, the total fair value of our equity investment in common shares of ApiJect was $100.1 million, which is included within Level 3 of the fair value hierarchy. Additionally, we own warrants to purchase up to 950,000 shares of common stock at any time or from time to time on or before April 15, 2032.
We also have a term loan agreement with a principal of ApiJect for $29.8 million, which matures on July 31, 2023. The loan is accounted for at cost plus accrued interest and is reported within Other assets in our Consolidated Statements of Financial Condition. The loan has a fair value of $30.0 million and $28.9 million at May 31, 2023 and November 30, 2022, respectively, which would be classified as Level 3 in the fair value hierarchy. For the periods presented below, interest income recognized on the loan is included in Interest revenues in our Consolidated Statements of Earnings (in millions):
Three Months Ended 
May 31,		Six Months Ended 
May 31,
2023202220232022
Interest income on term loan agreement$0.6 $0.6 $1.1 $1.1 
SPAC
We own 73.4% of the publicly traded units of a special purpose acquisition company (“SPAC”), which represents 25.7% of the voting shares of the SPAC at May 31, 2023. At May 31, 2023, the SPAC is considered a VIE. We have significant influence over the SPAC but we are not considered to be the primary beneficiary as we do not have control. Our investment is accounted for at fair value pursuant to the fair value option and is included within corporate equity securities in Financial instruments owned, at fair value, in our Consolidated Statements of Financial Condition. The fair value of the investment was $22.6 million and $22.8 million at May 31, 2023 and November 30, 2022, respectively, which is included within Level 1 of the fair value hierarchy.