Jefferies Group, which has been looking quietly to build out its wealth management operation over the past two years, scored a significant win last week with the addition of a former Morgan Stanley duo with around $1 billion in assets under management.
The hires, Jaime Fals and Eli Gelman, provide a strong boost to the wealth arm of Jefferies, which is better known for its investment bank. It has about $6 billion under management and 50 advisers in its wealth unit, according to
a July presentation.
“Over the past couple years, they've really expanded their wealth management offerings,” said Barbara Herman of the adviser recruiting firm Diamond Consultants Inc. “It's not a new firm, but it's sort of been recreated in terms of wealth management.”
Diamond Consultants has done work for Jefferies but was not involved in this deal, Ms. Herman said.
(More: InvestmentNews' Advisers on the Move database)
In May 2014, Jefferies brought on Michael Armstrong, the former head of Morgan Stanley's Private Wealth Management, which caters to ultrawealthy clients, to be head of Jefferies' wealth management operation. Mr. Armstrong also oversaw the development of Morgan Stanley's international growth strategies.
Mr. Fals and Mr. Gelman, who are based in Miami, had been at Morgan Stanley since 2007. They focused on clients in Central America and the Caribbean and were hired in a push to expand the Morgan Stanley's presence in those regions, according to a
statement announcing their hire from February 2007.
TRANSFORMING JEFFERIES
Ms. Herman said that Mr. Armstrong has been focused on building the wealth unit as a stand-alone division rather than as an add-on to the investment bank.
“Michael Armstrong is really transforming Jefferies from what it was originally,” as more of an off-shoot of the investment bank, Ms. Herman said.
A spokesman for the firm, Richard Khaleel, confirmed the hires but declined to comment on growth objectives.
Beginning in 2009, Jefferies' wealth unit had been led by Mark Peters, who left the unit in December 2013 to join a
hedge fund “after expressing frustration over restraints on the growth plans he had for the wealth division,” according to
a 2014 report from Reuters that cited people familiar with the decision.
A spokeswoman for Morgan Stanley, Christine Jockle, declined to comment on the moves.
