Variable Interest Entities

9 Months Ended

Aug. 31, 2025

Equity Method Investments and Joint Ventures [Abstract]

Variable Interest Entities

Note 10. Variable Interest Entities

VIEs are entities in which equity investors lack the characteristics

of a controlling financial interest. VIEs are consolidated by the

primary beneficiary. The primary beneficiary is the party who has

both (1) the power to direct the activities of a VIE that most

significantly impact the entity’s economic performance and (2)

an obligation to absorb losses of the entity or a right to receive

benefits from the entity that could potentially be significant to the

entity.

Our variable interests in VIEs include debt and equity interests,

commitments, guarantees and certain fees. Our involvement with

VIEs arises primarily from:

•Purchases of securities in connection with our trading and

secondary market making activities;

•Retained interests held as a result of securitization activities;

•Acting as placement agent and/or underwriter in connection

with client-sponsored securitizations;

•Financing of agency and non-agency mortgage-backed and

other asset-backed securities;

•Acting as servicer for a fee to automobile loan financing

vehicles;

•Warehouse funding arrangements for client-sponsored

consumer and mortgage loan vehicles and CLOs through

participation agreements, forward sale agreements, reverse

repurchase agreements, and revolving loan and note

commitments; and

•Loans to, investments in and fees from various investment

vehicles.

We determine whether we are the primary beneficiary of a VIE

upon our initial involvement with the VIE and we reassess

whether we are the primary beneficiary of a VIE on an ongoing

basis. Our determination of whether we are the primary

beneficiary of a VIE is based upon the facts and circumstances

for each VIE and requires judgment. Our considerations in

determining the VIE’s most significant activities and whether we

have power to direct those activities include, but are not limited

to, the VIE’s purpose and design and the risks passed through to

investors, the voting interests of the VIE, management, service

and/or other agreements of the VIE, involvement in the VIE’s

initial design and the existence of explicit or implicit financial

guarantees. In situations where we have determined that the

power over the VIE’s significant activities is shared, we assess

whether we are the party with the power over the most significant

activities. If we are the party with the power over the most

significant activities, we meet the “power” criteria of the primary

beneficiary. If we do not have the power over the most significant

activities or we determine that decisions require consent of each

sharing party, we do not meet the “power” criteria of the primary

beneficiary.

We assess our variable interests in a VIE both individually and in

aggregate to determine whether we have an obligation to absorb

losses of or a right to receive benefits from the VIE that could

potentially be significant to the VIE. The determination of whether

our variable interest is significant to the VIE requires judgment. In

determining the significance of our variable interest, we consider

the terms, characteristics and size of the variable interests, the

design and characteristics of the VIE, our involvement in the VIE

and our market-making activities related to the variable interests.

Consolidated VIEs:


	August 31, 2025 (1)
$ in millions	Secured Funding Vehicles	Other
Cash ...................................................................................	$—	$2.1
Financial instruments owned ........................................	—	64.5
Securities purchased under agreements to resell (2)	3,196.0	—
Receivables from brokers (3) .........................................	—	22.2
Other receivables .............................................................	1.7	3.0
Other assets (4) ...............................................................	—	87.6
Total assets ......................................................................	$3,197.7	$179.4
Financial instruments sold, not yet purchased ...........	$—	$6.5
Other secured financings (5) .........................................	3,195.8	25.7
Other liabilities (6) ...........................................................	6.2	28.9
Long-term debt ................................................................	—	70.1
Total liabilities .................................................................	$3,202.0	$131.2


	November 30, 2024 (1)
$ in millions	Secured Funding Vehicles	Other
Cash ...................................................................................	$—	$1.6
Financial instruments owned .........................................	—	40.0
Securities purchased under agreements to resell (2)	2,829.7	—
Receivables from brokers (3) .........................................	—	23.5
Other receivables .............................................................	—	3.0
Other assets (4) ...............................................................	—	90.3
Total assets ......................................................................	$2,829.7	$158.4
Financial instruments sold, not yet purchased ...........	$—	$7.6
Other secured financings (5) .........................................	2,823.0	26.1
Other liabilities (6) ...........................................................	6.7	23.1
Long-term debt ................................................................	—	70.1
Total liabilities .................................................................	$2,829.7	$126.9

(1)Assets and liabilities are presented prior to consolidation and thus a portion of

these assets and liabilities are eliminated in consolidation.

(2)Securities purchased under agreements to resell primarily represent amounts

due under collateralized transactions from related consolidated entities, which

are all eliminated in consolidation.

(3)$0.5 million and $1.5 million of receivables from brokers at August 31, 2025

and November 30, 2024, respectively, are with related consolidated entities,

which are eliminated in consolidation.

(4)$3.3 million and $3.4 million of the other assets at August 31, 2025 and

November 30, 2024, respectively, represent intercompany receivables with

related consolidated entities, which are eliminated in consolidation.

(5)$713.5 million and $719.0 million of the other secured financings at

August 31, 2025 and November 30, 2024, respectively, are with related

consolidated entities and are eliminated in consolidation.

(6)$27.6 million and $22.0 million of the other liabilities amounts at August 31,

2025 and November 30, 2024, respectively, are with related consolidated

entities, which are eliminated in consolidation.

Secured Funding Vehicles. We are the primary beneficiary of

asset-backed financing vehicles to which we sell agency and non-

agency residential and commercial mortgage loans, and asset-

backed securities pursuant to the terms of a master repurchase

agreement. Our variable interests in these vehicles consist of our

collateral margin maintenance obligations under the master

repurchase agreement, which we manage, and retained interests

in securities issued. The assets of these VIEs consist of reverse

repurchase agreements, which are available for the benefit of the

vehicle’s debt holders. In addition, we also from time to time

securitize other financial instruments and own variable interests

in the securitization vehicles to the extent that we consolidate

such vehicles.

Other. We are the primary beneficiary of certain investment

vehicles that we manage for external investors and certain

investment vehicles set up for the benefit of our employees as

well as investment vehicles managed by third parties where we

have a controlling financial interest. The assets of these VIEs

consist primarily of equity securities and broker receivables. Our

variable interests in these vehicles consist of equity securities,

management and performance fees and revenue share. The

creditors of these VIEs do not have recourse to our general credit

and each such VIE’s assets are not available to satisfy any other

debt.

We are the primary beneficiary of a real estate syndication entity

that develops multi-family residential property and manages the

property. The assets of the VIE consist primarily of real estate

and its liabilities primarily consist of accrued expenses and long-

term debt secured by the real estate property. Our variable

interest in the VIE primarily consists of our limited liability

company interest, a sponsor promote and development and

asset management fees for managing the project.

We are the primary beneficiary of special purpose vehicles that

hold risk retention notes issued as part of unsecured loan asset-

backed transactions. Our variable interest in the VIEs primarily

consists of our ownership of certificates issued by the VIEs.

Nonconsolidated VIEs


	August 31, 2025
	Carrying Amount		Maximum Exposure to Loss	VIE Assets
$ in millions	Assets	Liabilities	Maximum Exposure to Loss	VIE Assets
CLOs ......................................	$716.9	$41.3	$7,295.8	$15,893.2
Asset-backed vehicles ........	987.4	—	1,249.7	4,917.3
Related party private equity vehicles ............................	3.9	—	15.0	51.0
Other investment vehicles ..	1,468.4	—	1,850.2	28,117.2
Total .......................................	$3,176.6	$41.3	$10,410.7	$48,978.7


	November 30, 2024
	Carrying Amount		Maximum Exposure to Loss	VIE Assets
$ in millions	Assets	Liabilities	Maximum Exposure to Loss	VIE Assets
CLOs ......................................	$951.8	$26.5	$6,511.1	$14,872.4
Asset-backed vehicles ........	827.4	—	946.3	4,266.7
Related party private equity vehicles ............................	3.7	—	14.0	34.4
Other investment vehicles ..	1,107.8	—	1,365.8	19,064.1
Total .......................................	$2,890.7	$26.5	$8,837.2	$38,237.6

Our maximum exposure to loss often differs from the carrying

value of the variable interests. The maximum exposure to loss is

dependent on the nature of our variable interests in the VIEs and

is limited to the notional amounts of certain loan and equity

commitments and guarantees. Our maximum exposure to loss

does not include the offsetting benefit of any financial

instruments that may be utilized to hedge the risks associated

with our variable interests and is not reduced by the amount of

collateral held as part of a transaction with a VIE.

Collateralized Loan Obligations. Assets collateralizing the CLOs

include bank loans, participation interests, sub-investment grade

and senior secured U.S. loans, and senior secured Euro-

denominated corporate leveraged loans and bonds. We

underwrite securities issued in CLO transactions on behalf of

sponsors and provide advisory services to the sponsors. We may

also sell corporate loans to the CLOs. Our variable interests in

connection with CLOs where we have been involved in providing

underwriting and/or advisory services consist of the following:

•Forward sale agreements whereby we commit to sell, at a fixed

price, corporate loans and ownership interests in an entity

holding such corporate loans to CLOs;

•Warehouse funding arrangements in the form of:

◦Participation interests in corporate loans held by CLOs and

commitments to fund such participation interests;

◦Reverse repurchase agreements with collateral margin

maintenance obligations and commitments to fund such

reverse repurchase agreements; and

◦Senior and subordinated notes issued in connection with

CLO warehousing activities.

•Trading positions in securities issued in CLO transactions; and

•Investments in variable funding notes issued by CLOs.

Asset-Backed Vehicles. We provide financing and lending related

services to certain client-sponsored VIEs in the form of revolving

funding note agreements, revolving credit facilities, forward

purchase agreements and reverse repurchase agreements. We

also may transfer originated corporate loans to certain VIEs and

hold subordinated interests issued by the vehicle. The underlying

assets, which are collateralizing the vehicles, are primarily

composed of unsecured consumer loans, mortgage loans and

corporate loans. In addition, we may provide structuring and

advisory services and act as an underwriter or placement agent

for securities issued by the vehicles. We do not control the

activities of these entities.

Related Party Private Equity Vehicles. We have committed to

invest in private equity funds, which are in the process of being

fully liquidated (the “JCP Funds”, including JCP Fund V (refer to

Note 11, Investments for further information)), managed by

Jefferies Capital Partners, LLC (the “JCP Manager”). Additionally,

we have committed to invest in the general partners of the JCP

Funds (the “JCP General Partners”) and the JCP Manager. Our

variable interests in the JCP Funds, JCP General Partners and

JCP Manager (collectively, the “JCP Entities”) consist of equity

interests that, in total, provide us with limited and general partner

investment returns of the JCP Funds, a portion of the carried

interest earned by the JCP General Partners and a portion of the

management fees earned by the JCP Manager. At both

August 31, 2025 and November 30, 2024, our total equity

commitment in the JCP Entities was $133.0 million, of which

$123.2 million had been funded. The carrying value of our equity

investments in the JCP Entities was $3.3 million and $3.2 million

at August 31, 2025 and November 30, 2024, respectively. Our

exposure to loss is limited to the total of our carrying value and

unfunded equity commitment. The assets of the JCP Entities

primarily consist of private equity and equity related investments.

At both August 31, 2025 and November 30, 2024, we had also

committed to invest $1.0 million, of which $0.6 million was

funded in a private equity fund managed by us for the benefit of

our employees. The carrying value of our equity was $0.6 million

and $0.5 million at August 31, 2025 and November 30, 2024,

respectively.

Other Investment Vehicles. At August 31, 2025 and November 30,

2024, we had equity commitments to invest $1.77 billion and

$1.43 billion, respectively, in various other investment vehicles, of

which $1.39 billion and $1.17 billion was funded, respectively.

The carrying value of our equity investments was $1.47 billion

and $1.11 billion at August 31, 2025 and November 30, 2024,

respectively. Our exposure to loss is limited to the total of our

carrying value and unfunded equity commitment. These

investment vehicles have assets primarily consisting of private

and public equity investments, debt instruments, trade and

insurance claims and various oil and gas assets.

Mortgage-Backed and Other Asset-Backed Secured Funding

Vehicles. In connection with our secondary trading and market-

making activities, we buy and sell agency and non-agency

mortgage-backed securities and other asset-backed securities,

which are issued by third-party securitization SPEs and are

generally considered variable interests in VIEs. Securities issued

by securitization SPEs are backed by residential mortgage loans,

U.S. agency collateralized mortgage obligations, commercial

mortgage loans, CDOs and CLOs and other consumer loans, such

as installment receivables, automobile loans and student loans.

These securities are accounted for at fair value and included in

Financial instruments owned. We have no other involvement with

the related SPEs and therefore do not consolidate these entities.

We also engage in underwriting, placement and structuring

activities for third-party-sponsored securitization trusts generally

through agency (Fannie Mae, Federal Home Loan Mortgage

Corporation (“Freddie Mac”) or Ginnie Mae) or non-agency-

sponsored SPEs and may purchase loans or mortgage-backed

securities from third-parties that are subsequently transferred

into the securitization trusts. The securitizations are backed by

residential and commercial mortgage, home equity and

automobile loans. We do not consolidate agency-sponsored

securitizations as we do not have the power to direct the

activities of the SPEs that most significantly impact their

economic performance. Further, we are not the servicer of non-

agency-sponsored securitizations and therefore do not have

power to direct the most significant activities of the SPEs and

accordingly, do not consolidate these entities. We may retain

unsold senior and/or subordinated interests at the time of

securitization in the form of securities issued by the SPEs.

At August 31, 2025 and November 30, 2024, we held $1.16 billion

and $1.84 billion of agency mortgage-backed securities,

respectively, and $189.8 million and $201.1 million of non-agency

mortgage-backed and other asset-backed securities, respectively,

as a result of our secondary trading and market-making activities,

and underwriting, placement and structuring activities. Our

maximum exposure to loss on these securities is limited to the

carrying value of our investments in these securities. These

mortgage-backed and other asset-backed secured funding

vehicles discussed are not included in the above table containing

information about our variable interests in nonconsolidated VIEs.