After announcing that it was selling most of its Bache Futures unit to Societe Generale last month, Jeffries Group is reportedly in discussions with Macquarie Group about its precious metals business and trading team that wasn’t part of the previous deal in April. According to a report from Reuters, of the over 400 employees that are part of Bache Futures, only a small percentage of its brokers are expected to make the switch to Societe Generale when the deal closes later this year. Already, Jeffries has filed a statuary filing in New York, of which the firm gave notice to 120 of its staff that they will be laid off due to sale.
In regards to the precious metals division of Bache Futures, the unit is believed to consist of around twenty employees. For Macquarie, showing interest in Jeffries staff marks the second time the Australian bank has been in discussions with Jeffries, as they had also been sourced to be an interested party to purchase Bache Futures accounts before Societe Generale prevailed in their bid. Macquarie’s interest is based on their interest to grow their commodities business.
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In its most recent reporting period, the six month period ending September 2014, net trading income from their commodities business was reported at AUD382 million. Among its trading activity, commodities is the largest segment for Macquarie Group, consistently composing between 50-75% of total net trading income. Adding staff from Jeffries would potentially boost Macquarie’s coverage in New York, where the majority of the current precious metals employees are working.