petec Posted May 17, 2018 Share Posted May 17, 2018 How does Leucadia Investment Management sit within LUK? Is it a multi-manager platform such as Millenium? I don't know Millennium but LAM is effectively a startup multimanager platform. Leucadia seed the funds and take a stake in the management company. So far none of them has really taken off, I don't think, but I think the business is breakeven and clearly the potential is significant if they find the right fund/s. Link to comment Share on other sites More sharing options...
Shooter MacGavin Posted May 17, 2018 Share Posted May 17, 2018 The proxy reads like a comic book. They want to get compensated above average for doing better than they have done in recent past, which is basically terrible. They want to get compensated for returns only on "deployed capital" for which they are targeting 8% returns on equity on a 5x levered A/E business. So they want to earn sub 2% ROA? They hired consultants so that Handler and Friedman can justify their incredibly excessive pay and instead of comping themselves to Berkshire and Markel for executive pay, they want to be comp'ed to Private Equity and Investment Banking. Why bother? Just liquidate the whole thing. Link to comment Share on other sites More sharing options...
scorpioncapital Posted May 17, 2018 Share Posted May 17, 2018 Just imagine ...all they had to do was sell everything and put the 10 billion of tangible equity into an index fund with low fees. Then they could go to sleep and maybe take a small management fee home with a few experiments on the side. Investing is not like a PhD in physics. There are very few requirements to run money. Mostly the exams involve questions on ethics and trading protocol. It's quite ridiculous. If you don't have the skill, admit it and buy an index. Hard for wall Street types to admit this though , or pretty much anyone who invests for a living. The living part is the compensation not the results ! It's straight out of 'where are the customers yachts' Link to comment Share on other sites More sharing options...
Shooter MacGavin Posted May 17, 2018 Share Posted May 17, 2018 Just imagine ...all they had to do was sell everything and put the 10 billion of tangible equity into an index fund with low fees. Then they could go to sleep and maybe take a small management fee home with a few experiments on the side. Investing is not like a PhD in physics. There are very few requirements to run money. Mostly the exams involve questions on ethics and trading protocol. It's quite ridiculous. If you don't have the skill, admit it and buy an index. Hard for wall Street types to admit this though , or pretty much anyone who invests for a living. The living part is the compensation not the results ! It's straight out of 'where are the customers yachts' These guys are extra hilarious. They want to get comp'ed like private equity, but not deliver private equity results even though they have access to private equity amounts of leverage. Link to comment Share on other sites More sharing options...
benhacker Posted May 17, 2018 Share Posted May 17, 2018 The comp plan here is bad, totally agree. Link to comment Share on other sites More sharing options...
mcliu Posted May 22, 2018 Share Posted May 22, 2018 Any chance comp plan gets voted down? ::) https://www.businesswire.com/news/home/20180522005683/en/ Leucadia Has Repurchased 20 Million Shares of Common Stock Since April 10, 2018 Link to comment Share on other sites More sharing options...
LowIQinvestor Posted May 22, 2018 Share Posted May 22, 2018 Leucadia Has Repurchased 20 Million Shares of Common Stock Since April 10, 2018 https://www.businesswire.com/news/home/20180522005683/en/Leucadia-Repurchased-20-Million-Shares-Common-Stock#.WwRAov7K-NQ.twitter Link to comment Share on other sites More sharing options...
scorpioncapital Posted May 22, 2018 Share Posted May 22, 2018 So by this buyback move they have instantly achieved their 8% earnings per share growth target - or at least part of it? Perhaps they were thinking the easiest way to get the comp payout :) Link to comment Share on other sites More sharing options...
benhacker Posted May 22, 2018 Share Posted May 22, 2018 So by this buyback move they have instantly achieved their 8% earnings per share growth target - or at least part of it? Perhaps they were thinking the easiest way to get the comp payout :) Half of the 8% target is based on growth in TBV / share... not earnings. The other half is shareholder (total) return. I think buybacks will help both, but not for the reason you imply. Link to comment Share on other sites More sharing options...
arcticfox Posted May 23, 2018 Share Posted May 23, 2018 Is anyone headed to the annual meeting tomorrow. If so any thoughts or notes would be greatly appreciated. I listen to the investor day call every October and and have shared some notes. Happy to share those. I was pleased to see that they bought back some stock. I have been a longtime holder. Paid in the $25 range years back and added between $16-19 in 2016. I have always thought that once they demonstrated book value growth again that the stock would revalue towards book. Not yet. Also slightly disappointed to see they announced the transactions and bought back $500mm of stock in a month yet it's still down 10 percent ytd and lagging most peers. This stock puzzles me. They are not that bad. Link to comment Share on other sites More sharing options...
Spekulatius Posted May 23, 2018 Share Posted May 23, 2018 Is anyone headed to the annual meeting tomorrow. If so any thoughts or notes would be greatly appreciated. I listen to the investor day call every October and and have shared some notes. Happy to share those. I was pleased to see that they bought back some stock. I have been a longtime holder. Paid in the $25 range years back and added between $16-19 in 2016. I have always thought that once they demonstrated book value growth again that the stock would revalue towards book. Not yet. Also slightly disappointed to see they announced the transactions and bought back $500mm of stock in a month yet it's still down 10 percent ytd and lagging most peers. This stock puzzles me. They are not that bad. I said this before, but GS even at current prices is still a better deal. Pay up 1.25x book for a first rate investment bank, rather than 1x tangible book for a 2nd grade one. Profitability and even OE are lower for GS too. Link to comment Share on other sites More sharing options...
scorpioncapital Posted May 23, 2018 Share Posted May 23, 2018 Some insurance companies sometimes trade below book and are a pile of bonds. I think the book Davis Dynasty describes how the guy got very wealthy just buying and selling insurance companies based on valuation. Link to comment Share on other sites More sharing options...
Spekulatius Posted May 23, 2018 Share Posted May 23, 2018 Some insurance companies sometimes trade below book and are a pile of bonds. I think the book Davis Dynasty describes how the guy got very wealthy just buying and selling insurance companies based on valuation. I have generally done well selling decent insurance companies below tangible book. Currently there isn’t much available, but there have been times, when you could buy decent insurance companies for 0.8x book. Link to comment Share on other sites More sharing options...
LowIQinvestor Posted May 24, 2018 Share Posted May 24, 2018 Leucadia National Corporation Changes Name to Jefferies Financial Group Inc. Jefferies Financial Group Inc. Announces Quarterly Dividend https://www.businesswire.com/news/home/20180523006298/en/ Link to comment Share on other sites More sharing options...
Mungerish Posted May 24, 2018 Share Posted May 24, 2018 I was at the meeting and it was a nothing burger in terms of any new information. Perhaps the worst LUK meeting I have ever attended in terms of Q&A...Yet the highest turn out in terms of shares voted in favor of the name change, etc. This was not the only paradox They are trying to simplify the LUK/JEF story and get analyst coverage, which is good. There are lots of good things happening which have all been previously disclosed. The irony is that they still have the meeting in a basement with no web cast or transcript...Where they talk about getting more coverage. This is my main bitch. Handler mentioned that Joe and Ian were/are legends, which is true. Brian chimed in that value has way under performed growth and that is part of the reason they lag in share price. They are all frustrated with the share price and that is why they have taken to buying in the stock now that they have excess liquidity and are ready for the next down turn in that sense. The real reason the stock under performs in my view is that they are NOT Joe and Ian even though they have done a very good job with the hand they were dealt....So they can't get away with doing the bare minimum of being a public company and get a decent share price. Joe and Ian could get away with that.... ( Meaning no quarterly calls, AM in a basement, one investor day per year in spite of having a very complicated story) The real frustration for me is that they are in the business of employing analysts, raising capital, underwriting securities, etc....Surely they do not need the likes of me to tell them this. My thesis is that they need to become more "promotional" in their view...which I would call more traditional.... and highlight the good things they have accomplished and I believe they will. It shouldn't be trading where it is and they are need to change that by owning the fact that they need to behave more closely to their peers in terms of investor relations. The fundamentals of why I think its undervalues have all been discussed here so I'm not going to repost any of that. Cheers! Link to comment Share on other sites More sharing options...
benhacker Posted May 24, 2018 Share Posted May 24, 2018 Hey M, I appreciate you sharing. "My thesis is that they need to become more "promotional" in their view...which I would call more traditional.... and highlight the good things they have accomplished and I believe they will." However, I agree with much of what you say, the remedy here, I disagree with. I think you need to communicate clearly and honestly about your business... they do it ok, full transparency IMO, and no need to promote. It won't change anything long term, and probably would do much in the short term. I see no irony in them helping others capital raise but don't do the same for themselves.... because they are not raising capital. Buybacks in size are the answer to this situation, again, IMO. Again, my 2 cents... probably worth less than that. Link to comment Share on other sites More sharing options...
undervalued Posted May 24, 2018 Share Posted May 24, 2018 Just to quote the BusinessWire link above: Jefferies’ CEO, Rich Handler, and President, Brian Friedman, noted, “Changing our name to Jefferies Financial Group Inc. reflects that we are now a diversified financial services company, and Jefferies is by far our largest business and our engine of opportunity. We will continue to use the wonderful Leucadia name in our asset management and merchant banking activities where its reputation for long-term value creation is widely recognized. “Jefferies Financial Group Inc. better reflects who we are today and going forward, materially aids the brand recognition of our Jefferies investment banking and trading operations, and unifies our presence and our prominence in the financial community.” So since they're seeing Jefferies as largest and engine for opportunity, they'll probably put more capital into it? Like others are saying, Rich and Brian are not Ian and Joe. I doubt they can emulate Ian/Joe. Rich and Brian have always been in finance than turn around guys. Even though LUK acquired JEFF, I think it's becoming the other way around. Link to comment Share on other sites More sharing options...
LowIQinvestor Posted May 24, 2018 Share Posted May 24, 2018 Thanks for sharing your thoughts on the annual meeting & strategy moving forward! Ironically the volume in JEF today ( their debut as Jefferies) is insanely low. I agree they need to be a little more visible. Link to comment Share on other sites More sharing options...
scorpioncapital Posted May 24, 2018 Share Posted May 24, 2018 If they hired me I'd suggest 1. Sell everything, fire (almost) everyone, reduce compensation to minimum. 2. Buy BRK or S&P500 index and manage the equity-cash ratio as you feel fit. 3. Go play golf and I suspect the results will be equal or better than what they have done or plan to do over the next decade. However I think 'dumb' advice like this doesn't get much respect from the 'intelligent' investment programs they are running. Link to comment Share on other sites More sharing options...
benhacker Posted May 24, 2018 Share Posted May 24, 2018 Undervalued: So since they're seeing Jefferies as largest and engine for opportunity, they'll probably put more capital into it? Like others are saying, Rich and Brian are not Ian and Joe. I doubt they can emulate Ian/Joe. Rich and Brian have always been in finance than turn around guys. Even though LUK acquired JEFF, I think it's becoming the other way around. They started dividend-ing out cash from JEF recently (to holdco)... how do you frame that into the context of what was said above? I'm seriously curious, I have my own opinion, but it seems necessary to juxtapose actions/words... Link to comment Share on other sites More sharing options...
undervalued Posted May 24, 2018 Share Posted May 24, 2018 Undervalued: So since they're seeing Jefferies as largest and engine for opportunity, they'll probably put more capital into it? Like others are saying, Rich and Brian are not Ian and Joe. I doubt they can emulate Ian/Joe. Rich and Brian have always been in finance than turn around guys. Even though LUK acquired JEFF, I think it's becoming the other way around. They started dividend-ing out cash from JEF recently (to holdco)... how do you frame that into the context of what was said above? I'm seriously curious, I have my own opinion, but it seems necessary to juxtapose actions/words... In the past, JEF didn't pay any meaningful dividends. They kept it constant. Looking from history, it's seems likely that they will keep dividend at .10 until who knows when. For the past few acquisitions, all of them have been related to financial/forex companies. I don't really care what kind of companies they invested in as long as it produce good returns. Now that they started to build some nice cash cushion, I guess we'll see what kind of companies they'll purchase. Link to comment Share on other sites More sharing options...
benhacker Posted May 24, 2018 Share Posted May 24, 2018 Uv, I’m referring to sub->holdco dividends. Not shareholder dividends. If Jefferies (the sub) is paying dividends to jef holdco... how do you think that aligns to handlers comments. If it’s not clear you can ignore. Typing from phone. ;) Link to comment Share on other sites More sharing options...
undervalued Posted May 24, 2018 Share Posted May 24, 2018 Uv, I’m referring to sub->holdco dividends. Not shareholder dividends. If Jefferies (the sub) is paying dividends to jef holdco... how do you think that aligns to handlers comments. If it’s not clear you can ignore. Typing from phone. ;) I get it. I don't think it matters anymore right because now it's all Jefferies? In the past there was discussion whether Handler will ever sell JEF, I doubt this will happen ever. Maybe I am wrong, I hope I am wrong. Let me just tell you that if this thing hits 45 again, I am reducing half lol. Link to comment Share on other sites More sharing options...
Parsad Posted June 6, 2018 Share Posted June 6, 2018 Just a heads up...the old LUK and JEF threads have now been merged into this thread. Cheers! Link to comment Share on other sites More sharing options...
greenwave Posted July 27, 2018 Share Posted July 27, 2018 Just a heads up...the old LUK and JEF threads have now been merged into this thread. Cheers! --- " Jefferies Financial Group Inc. Announces Second Quarter 2018 Results Business Wire Business Wire•July 26, 2018 NEW YORK--(BUSINESS WIRE)-- Increases Share Buyback Authorization by Additional 25 Million Shares, Having Repurchased over 24 Million Shares in the Second Quarter Increases Quarterly Dividend by 25% to 12.5 Cents Per Share....." ------- Hopefully the buybacks and dividend increase are indicative of a long term sustainable trend towards intrinsic value . greenwave ----- 'At December 31, 2017 , we have recognized net deferred tax assets of $743.8 million. ' Maybe this finally becomes a useful asset over the next few years . Link to comment Share on other sites More sharing options...
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