20 Apr 2011 Leucadia - 2010 Annual Report ( Portfolio )
We breathed a sigh of relief when 2010 wound to an end. 2008 was the infamous year. A group of bankers and financial engineers almost brought down the U.S. economy and subsequently a significant portion of the global economy as well. Happily, the past two years have been different. The financial carnage brought on by excessive risk taking is beginning to repair itself and the world’s economy is recovering.

Jefferies Group, Inc. (NYSE:JEF) is a full-service investment bank and institutional securities firm. Jefferies offers its customers capital markets executions, mergers and acquisitions, restructuring and other advisory services. They have 30 offices in 10 countries.

In April 2008, Leucadia sold to Jefferies 10 million Leucadia common shares and received 26,585,310 Jefferies common shares and $100 million in cash. Including shares acquired in open market purchases, Leucadia owns 49,351,385 Jefferies common shares, approximately 28%, for a total investment of $812.4 million. At December 31, 2010, Leucadia carries Jefferies on its books at fair value of $1.3 billion. Separately, our investment in Jefferies High Yield Trading, LLC had a decent year and earned 6%.

In the last few years Jefferies has expanded across the globe and hired, from other similar institutions, talented people or groups thereof, moving from a boutique firm to a worldwide full- service investment bank. Quite an amazing feat in a challenging economy!

We have known the Chief Executive, Richard Handler, for a very long time and hold him in very high regard. We believe that he and his colleagues will continue to enrich their shareholders.