Jefferies Financial Group has reported a $30m (£22.3m) loss linked to the collapse of US car parts supplier First Brands, weighing on the US investment bank’s fourth-quarter results.
Jefferies reported net earnings attributable to common shareholders of $190.9m for the last three months of 2025, down from $205.7m in the same period last year, largely reflecting a $30m markdown on an investment tied to First Brands.
The loss was tied to Jefferies’ stake in Point Bonita, an investment fund, which provided financing to First Brands.
Jefferies said adjusted net earnings, excluding the markdown related to the Point Bonita investment, were $213.5m, or $0.96 per diluted share.
The Point Bonita investment loss was recorded within Jefferies’ asset management division, where net revenues fell to $187m from $315m in the fourth quarter of 2024.
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“Asset management fees and investment return revenues of $81m was lower from the prior year quarter,” said Richard Handler, chief executive, and Brian Friedman, president. “While fee income was stable, an increase in investment return performance from certain strategies was offset by underperformance in other strategies including a pre-tax loss of $30m related to our investment in Point Bonita.”
First Brands collapsed last year, with its financial difficulties compounded by the earlier bankruptcy of subprime auto lender Tricolor Holdings. The failures rattled debt investors and heightened scrutiny of the private credit market.
In November, it was announced that Jefferies was being investigated by the Securities and Exchange Commission over its links to First Brands.
Despite the loss, Jefferies reported total net revenues of $2.07bn for the quarter, up from $1.96bn a year earlier.
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The bank’s investment banking division posted net revenues of $1.19bn, up 20 per cent the prior year quarter, “driven by market share gains and a stronger overall market for our services”, Handler and Friedman said.
Advisory net revenues reached $634m, marking the firm’s “second-best quarter on record”, while equity underwriting revenues rose, supporting the overall increase in investment banking income.
Fixed income revenues, however, fell 14 per cent, which the bank attributed to “persisted credit market headwinds” that reduced overall activity, the firm said.
“Our quarterly results reflect strong performance and sustained momentum in both Investment Banking and Equities, with net revenues increasing 20 per cent and 18 per cent, respectively, partially offset by lower net revenues in Fixed Income and Asset Management,” Handler and Friedman added. “Adjusting for the impact of Point Bonita, our businesses delivered an adjusted return on adjusted tangible shareholders’ equity of 12.9 per cent.”
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