Dealing with personal loss while navigating chaotic markets

The longtime head of Jefferies was set for 2020 to be a celebratory year

Jefferies entered 2020 with record quarterly earnings, setting chief executive Rich Handler on course for a celebration to mark his 20th year at the helm of one of the world’s biggest independent investment banks.
Within weeks of closing that quarter on February 29, New York-based Jefferies was navigating chaotic markets from hastily-created home offices as its hometown became the pandemic’s epicentre and global economies lurched towards recession.
Then, coronavirus claimed the life of Mr Handler’s longtime finance chief Peg Broadbent, who was just 56, a shock made worse by the inability to properly grieve “a great partner to all of us” because of lockdown restrictions.
Mr Handler, 59, who professes to be more interested in doing his job than talking about it but has amassed 22,600 followers on Instagram, does not consider the past few months the toughest in his career.

That honour falls to times when he or his company were more uniquely afflicted, such as in 2011, when Jefferies was falsely accused of having the same sovereign debt problems as those that tipped futures and options broker-dealer MF Global over the edge, or in 1990, when the collapse of investment bank Drexel cost Mr Handler his job just as he was about to become a father.
Mr Handler, who grew up in New Jersey and studied at the University of Rochester and then Stanford, says he views the current environment with a mixture of “incredible sadness” for the misery wrought by the pandemic and the protests against racism sweeping through the US, and optimism about the world’s capacity — and his bank’s capacity — to rally.

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He talks about the sadness mostly in terms of what the world is going through, but there is undoubtedly a personal edge. Last week, Jefferies raised $9.25m in Broadbent’s honour through a charity day where trading commissions and donations from staff and the firm were channelled to almost 90 mostly smaller groups assisting with coronavirus relief.
“When you have someone who passes from coronavirus, there’s no funeral, there’s no real closure, there’s no service, at least not for a while,” says Mr Handler over a Zoom call from the Westchester County estate where he is waiting out the pandemic with his wife and four children.
“For those who wanted to honour Peg, this was a good chance for them to do it in a positive manner by doing good. But it still doesn’t take away from the fact that you never really have a chance to grieve for somebody.”

Mr Handler sees a long path ahead for the country at large as well, demanding a health solution for the virus, a “real change in racial relations” and global partnership to replace the “isolationism” of recent years. “It’s going to take . . . some sacrifice, which means probably higher taxes,” he says. “I’m an optimist that [recovery] will happen, it’s just going to take time and a lot of work and co-operation.”
As for the bank, in a recent staff memo Mr Handler and his president Brian Friedman wrote that their hopes of a special year were still “intact”, a reference to their goal of record annual profits in 2020.
“We wouldn’t have said that . . . if we didn’t really rally well in the last two months, gain a lot of market share, help our clients in a significant way, and really perform well internally,” he says.

He and Mr Friedman have been driving performance by communicating exhaustively with staff since they were scattered to the four winds in March.
Written dispatches include thanking staff for working “tirelessly”, circulating scientific material on the virus and expressing their shared “heartbreak” at the killing of African-American George Floyd by a white police officer and the protests that followed across the US.
In one memo, Mr Handler writes in bold that staff should “completely forget the markets and all work issues” over the three-day Easter weekend, somewhat surprising advice from a man who says he’s worked most weekends for the past 30 years and is so steeped in the bank he wears a Jefferies T-shirt at his home office and has a Jefferies baseball cap positioned on his book case, in his webcam’s eye line.
Mr Handler stresses that balance is important — indeed, that’s part of the purpose of his Instagram account, where he uses pictures of him and his family at laser tag or doing puzzles to show the younger generation that finance CEOs are “real people . . . they have families and kids and they don’t take themselves too seriously and can have fun”.

He also uses the social messaging platform as a forum to talk to a largely millennial audience about topics that resonate with them, such as diversity and advice on the importance of things such as “integrity, respect, humility and dedication”.
Courting young talent is important. Jefferies’ success in growing revenues by almost 40 per cent in the four years since 2007 came on the back of 2,000 new hires, a large number for a bank that has 4,000 staff. “We have been actively recruiting, interviewing and hiring people since the Covid crisis started”, Mr Handler says. “Difficult periods can be the best times to attract great talent.”
Some have been recruited entirely over Zoom, several have come to Mr Handler’s estate in Westchester and done socially distant interviews outside.
He won’t say how many staff he wants to add — “I’ve never been able to do that or understand how people could do that because our world changes so much.”

It’s an apt comment, given that the world is arguably on the cusp of unprecedented change. JPMorgan chief executive Jamie Dimon recently said the crisis should be a “wake-up call” for an America where too many people have been left behind for too long.
That has uncomfortable implications for banks, who are the bastions of the current economic system, and people such as Mr Dimon and Mr Handler, who are paid many millions of dollars to run them.
The Jefferies boss argues that his bank is a positive force, helping companies raise money and manage it, while paying a “boatload of taxes” and “creating value” for shareholders and bondholders. Jefferies made $7m of net profits when Mr Handler joined the bank in 1990. Last year, it made $415m.

“Are we doing God’s work?” he says, invoking the phrase that former Goldman Sachs boss Lloyd Blankfein was pilloried for coining in 2009. “No. I’m not saying that we deserve to be knighted. But I’m also not going to be embarrassed by what our industry has done.”
He disputes reports that he is Wall Street’s best-paid bank boss and argues that any conversation about income distribution after the pandemic must examine issues broader than finance or executive pay.
“It’s not an easy question — you can’t just wave a magic wand and say, ‘OK, I’ll redistribute my income from here to there’, and solve all the problems,” he says, describing the role of taxes, philanthropy and job creation in any solution.
Mr Handler says he has been told that empathy has been one of his “biggest advantages” throughout his career and that he has honed that further during this crisis, by helping his junior staff as they adjust to life where “everything is on hold”.
Still, Jefferies hasn’t followed bigger banks such as Goldman and Morgan Stanley by soothing staff with commitments not to make any lay-offs this year.

“You don’t make promises you can’t keep and you never know what’s going to happen in the future in our industry,” Mr Handler says. “What we have told people is that the thought of lay-offs hasn’t come up in even one of our senior conversations since the virus surfaced.”
That means that “if you were not a good performer before the crisis, nobody should think this virus will be good cover to continue not doing a good job,” he adds.
The message to most of his staff is more upbeat.
“We have told everyone to get to work and worry about things you can control like your work ethic, creativity, attitude, integrity and teamwork, and don’t worry about the nonsense that you can’t control,” he says.
“If we all do that, we will continue on and have a very good year, despite the challenges and volatility in the markets.”