Jefferies Said to Reorganize Leveraged Finance, Promoting Walshby , , and
Unit chief Lockhart, sponsors head Sokoloff said to leave bank
Firm looks to boost coordination between unit, joint venture
Jefferies Group is reorganizing businesses that help fund corporate deals, elevating senior investment banker Jim Walsh to oversee its leveraged finance unit as Kevin Lockhart leaves, according to people with knowledge of the matter.
The move gives Walsh responsibility for the unit at Jefferies and a related origination business at the bank’s joint venture with MassMutual Financial Group, the people said, asking not to be identified discussing personnel matters. He will report to both Ben Lorello, who leads investment banking and capital markets at Jefferies, and Carl Toriello, president of the Jefferies Finance venture, one person said. Walsh also will serve as chairman of consumer and retail investment banking, the business he ran before the change.
Adam Sokoloff, global head of sponsors, also is leaving the firm, one of the people said.
The overhaul comes at a difficult time for investment banks that arrange financing for buyouts. Investors pulled back from junk bonds and other high-risk debt last year on concern that companies may struggle to meet obligations amid plunging commodities prices and global economic weakness. At Jefferies, which has won more business with clients seeking buyout financing in recent years as stricter rules reined in big banks, the combination under Walsh is aimed at improving coordination, one of the people said.
Jefferies hired Walsh in 2007 from Wachovia Corp. The latest moves were reported earlier by Reuters.
MassMutual created the joint venture with Jefferies in 2004 to offer senior loans to middle-market and growth companies. In 2011, the firms said they were doubling their capital commitments, each contributing an additional $250 million of equity to help it grow.
Jefferies, owned by Leucadia National Corp. and run by Richard Handler, climbed to 11th last year from 20th in 2011 among underwriters of U.S. leveraged loans, according to data compiled by Bloomberg. It ranks 16th so far this year. In recent months, it and other investment banks have had to offer some debt at deep discounts to attract investors.
Jefferies was among investment banks last year that struggled to sell debt backing Sycamore Partners’s acquisition of retailer Belk Inc. It also was among banks in a discounted offering for Fullbeauty Brands LP’s buyout by Apax Partners.
Among other personnel changes, Jefferies named Robert Fullerton its U.S. head of leveraged finance, one of the people said. He previously was U.S. co-head of financial sponsors and has spent more than a decade at the bank. John Tibe and Steve Tricarico were promoted to U.S. co-heads of both consumer and retail investment banking, the person said. They previously focused on retail clients. U.S. sponsors co-head Jeffrey Greenip was promoted to global head of sponsors.
Brian Wolfe, who’s been at Jefferies for more than two decades, remains head of leveraged finance capital markets.