JJEFJefferies Financial Group Inc.

Jefferies is an investment bank: it advises on deals, underwrites securities and trades on its own account.

The firm occupies a niche between the largest banks and small boutiques: big enough to underwrite a bond issue or run a major merger, and flexible enough to take on deals the giants consider small. Growth came through hiring banker teams away from larger institutions.

Income is cyclical and depends on deal market activity: in a quiet year advisory revenue halves. The trading arm smooths that but adds balance sheet risk — here, unlike at independent advisers, the bank holds positions. Risks: the deal market, the quality of trading positions and retaining bankers. Compensation is the largest cost and the main lever management can pull in a lean year. A dividend is paid.