“I just looked at it and laughed. I said in my head ‘It’s rich’, “said Tilman Fertitta, who hosted Handler that weekend on his yacht, anchored off the Bahamas. “Just because you’re a banker does not mean you have to be rigid.”
Fertita’s empire spans casinos, restaurants and ownership of the Houston Rockets, and the yacht was the setting for another deal. He calls Handler one of his closest friends and credits the banker with building a “juggernaut” that can go toe to toe with more established rivals.
“When we’re sitting at night talking and I think Rich’s getting too big for his bitches just because he’s worth a billion dollars now, I pull my accounts out and put him back in his place. said Fertitta with a laugh.
Handler declined to discuss her wealth, pointing out that the Gomez video in which he pretends to be after her job was for a wolf-preserving charity. The Archegos losses were described by people with knowledge of the case, and Handler refused to disclose the number.
Early in his career, the New Jersey native became one of Michael Milken’s most devoted disciples. After the junk-bond king’s empire collapsed, Handler rejected large banks guaranteeing lucrative paychecks and instead jumped to New York-based Jefferies.
Lure: Trader could keep some of the profits from his group. He has used this agreement to build more than 7 percent ownership of Jefferie’s stock over three decades. It is now the largest part of his fortune. Top it off with cash bonuses, real estate interests and private partnership bets, and his wealth now exceeds US $ 1 billion, according to the Bloomberg Billionaires Index.
Dressed in his typical polo shirt and khaki and with an Eli Manning bobblehead nodding at his desk, Handler marks victories and complaints. He offers a powerful defense when reminded of how Jefferies has long been ignored or treated as a nuisance by major competitors.
“We’ve always been the regulars they wish would disappear,” Handler said. “I would love for them to keep saying we will never be them. In their minds we are fast No. 497. Be underestimated, be pejorative. We continue to perform for our customers. ”
Some numbers he holds high: The jump in advisory and capital market revenues from $ 90 million when he now took over to $ 4 billion now. Another: About 69 percent of the banking business is recurring revenue – proof that it can build lasting ties.
“If I text Rich Richler and he’s not calling me back in 10 minutes, I’ll be stupid,” said Doug Cifu, CEO of Virtu Financial. Challenged to prove it, he taps a “Call me” text out to Handler, who calls 30 seconds later. Cifu tells him it was just a test and “you can get back to work.”
Handler is not tired of throwing himself out like an ordinary guy from Jersey and tackles the notion that he is a merchant with high finances.
“There is no world of ‘high funding’. It’s all a friggin ‘myth, ”he said. “I sold door-to-door vacuum cleaners and life insurance in college. I came to the office today from the center of the subway, I had to convince a guy next to me to wear a mask. This is my real world with ‘high funding’. ”
He gets big eyes to talk about the lasagna Bruce Springsteen once served when he was invited to the boss’s place. The two photos on his desk? One with his family and another with Springsteen. And then there’s the signed guitar from the singer that says “from one New Jersey guy to another.”
A checked building manager in Jefferie’s old office in Connecticut once sent a note to all the tenants asking them to stop wearing flip-flops and shorts in the office. Acting was the culprit.
But he is hardly ashamed of his budding wealth.
“I pay a boatload tax. Revise me 27 times. Every time they audit me, I get money back, ”Handler said. “I wish my accountants were not so conservative.”
He points to his company’s charitable record and the role it plays in helping companies grow and hire more people. It is reminiscent of the lines Milken preached in the 1980s.
Competing companies enjoy pointing out that Jefferies wins into risky trades that others may reject. The downside of that reputation is that when leading companies need help, Jefferies are less likely to be their first call. These prejudices make Handler sting.
“When our same people were in our competing companies, they were ‘prestigious investment banks making quality deals,'” Handler said. “Somehow, as they walked in our doors, they were scrapped.”
The edge of Handler’s tone has been sculpted over 30 years as he urged skeptics to take Jefferies more seriously. Given his all-consuming style, it’s easy to see how everything that involves the company is personal to Handler.
Now the risk for Jefferies is what has proven to be its biggest edge through the pandemic: How does a pure investment bank maintain growth when the boom rolls out?
His approach means pushing clients together for his trampoline class or a karaoke session, or the time when Handler brought his mother to a business event in Florida because she lived there.
The first thing you need to know is “you never leave a Jewish mother,” Virtu’s Cifu said. But “there is not another CEO on Wall Street who would have brought his mother to the event, who hosted an important client.”
Where Jefferies has made some of its most visible gains, the bank is the so-called middle market. As regulators put pressure on the big banks to ease heavily leveraged corporate finance, Jefferies gained market share and has kept it.
There have been shocking moments: While the memories of investment banks collapsing in 2008 were still fresh, credit rating agency Egan Jones questioned whether Jefferies was overleveraged, alarming the stock market. Trader – who still smokes about the episode – turned around and merged Jefferies with the investing conglomerate Leucadia National., Which had holdings in everything from wineries and beef to real estate and strengthened its capital base. Traders have spent the past few years removing these non-financial assets.
Now the risk for Jefferies is what has proven to be its biggest edge through the pandemic: How does a pure investment bank maintain growth when the boom rolls out? It lacks the adjacent divisions of its major rivals, such as a giant wealth transaction, a trillion-dollar management arm, or a business facing consumers. The less volatile companies help banking giants keep their profits up when there is less to do on Wall Street.
Trader considers the simplicity of the company as an advantage and avoids self-destructive fights that conglomerate banks experience.
“We don’t have a culture where the fixed income team hates the stock team and they both hate investment banking,” he said. “With the typical Wall Street dysfunctional culture when there is a bad year, there is a knife fight over the bonus pool. It’s not a one-man show, we have a team that has done their butt. ”
But for a man who rose to the CEO position when he was 39 and now in his 21st year there, what about succession? Traditions can be difficult to perform and disrupt. JPMorgan, Morgan Stanley and Bank of America are all on slow paths to testing and nurturing any successors to their CEOs who have already spent more than a decade at the top.
Handler points out that he only just turned 60, the age when many bosses first took over.
“If I ever felt like I was going on for too long, people would tell me. I would probably know that before they do, ”Handler said. “That said, do I sound like a guy who wants to leave?”