Variable Interest Entities

3 Months Ended

Feb. 28, 2026

Equity Method Investments and Joint Ventures [Abstract]

Variable Interest Entities

Note 9. 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;

•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:


	February 28, 2026 (1)
$ in millions	Secured Funding Vehicles	Other
Cash ...................................................................................	$0.1	$2.1
Segregated cash ..............................................................	—	2.3
Financial instruments owned ........................................	14.9	163.5
Securities purchased under agreements to resell (2)	2,860.1	0.8
Receivables from brokers (3) .........................................	—	69.6
Other receivables .............................................................	0.5	3.1
Other assets (4) ...............................................................	—	86.1
Total assets ......................................................................	$2,875.6	$327.5
Financial instruments sold, not yet purchased ...........	$—	$94.8
Other secured financings (5) .........................................	2,874.2	18.7
Payables to brokers and dealers ...................................	—	1.2
Other liabilities (6) ...........................................................	6.6	85.7
Long-term debt ................................................................	—	70.2
Total liabilities .................................................................	$2,880.8	$270.6


	November 30, 2025 (1)
$ in millions	Secured Funding Vehicles	Other
Cash ...................................................................................	$—	$1.7
Segregated cash ..............................................................	—	1.4
Financial instruments owned .........................................	1.4	142.6
Securities purchased under agreements to resell (2)	3,043.4	121.5
Receivables from brokers (3) .........................................	—	104.1
Other receivables .............................................................	—	3.1
Other assets (4) ...............................................................	—	87.1
Total assets ......................................................................	$3,044.8	$461.5
Financial instruments sold, not yet purchased ...........	$—	$83.8
Other secured financings (5) .........................................	3,042.4	21.6
Repurchase agreement ...................................................	—	147.8
Other liabilities (6) ...........................................................	7.3	85.1
Long-term debt ................................................................	—	70.2
Total liabilities .................................................................	$3,049.7	$408.5

(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 on related consolidated entities, all of

which are eliminated in consolidation.

(3)Includes $0.5 million and $0.5 million at February 28, 2026 and November 30,

2025, respectively, with related consolidated entities, which are eliminated in

consolidation.

(4)Includes $3.5 million and $3.4 million at February 28, 2026 and November 30,

2025, respectively, with related consolidated entities, which are eliminated in

consolidation.

(5)Includes $709.0 million and $780.5 million at February 28, 2026 and

November 30, 2025, respectively, with related consolidated entities, which are

eliminated in consolidation.

(6)Includes $84.3 million and $84.0 million at February 28, 2026 and

November 30, 2025, respectively, with related consolidated entities, which are

eliminated in consolidation.

Secured Funding Vehicles. We sell agency and non-agency

residential and commercial mortgage loans, and asset-backed

securities to asset-backed financing vehicles 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, 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. We also from time to time

securitize other financial instruments and own variable interests

in other securitization vehicles.

Other. We manage investment vehicles for external investors and

for the benefit of our employees and we may also hold a

controlling financial interest in investment vehicles managed by

third parties. 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 arrangements. 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 interests in the VIEs primarily

consist of our ownership of certificates issued by the VIEs.

Nonconsolidated VIEs


	February 28, 2026
	Carrying Amount		Maximum Exposure to Loss	VIE Assets
$ in millions	Assets	Liabilities	Maximum Exposure to Loss	VIE Assets
CLOs ......................................	$739.9	$51.7	$6,221.1	$20,689.2
Asset-backed vehicles ........	1,392.5	—	1,900.2	7,582.6
Related party private equity vehicles ............................	3.5	—	13.4	61.3
Other investment vehicles ..	1,715.1	—	1,908.0	71,800.9
Total .......................................	$3,851.0	$51.7	$10,042.7	$100,134.0


	November 30, 2025
	Carrying Amount		Maximum Exposure to Loss	VIE Assets
$ in millions	Assets	Liabilities	Maximum Exposure to Loss	VIE Assets
CLOs ......................................	$1,245.3	$96.5	$7,055.5	$17,600.4
Asset-backed vehicles ........	1,207.3	—	1,797.1	6,616.0
Related party private equity vehicles ............................	3.5	—	14.3	57.7
Other investment vehicles ..	1,722.7	—	2,009.6	74,007.9
Total .......................................	$4,178.8	$96.5	$10,876.5	$98,282.0

Maximum Exposure to Loss

Maximum exposure to loss represents the total of the carrying

value of our on-balance sheet interests in the unconsolidated

VIEs and the notional amount of any unfunded off-balance sheet

arrangements with the unconsolidated VIEs. With respect to

CLOs and asset-backed vehicles, the off-balance sheet

arrangements typically represent the undrawn notional amount of

arrangements to finance the acquisition of assets during the

warehousing and pre-closing phase of the vehicles. The

maximum exposure to loss is based on the unlikely event that all

of the assets in the VIEs become worthless and incorporates not

only potential losses associated with the carrying amounts of

assets recognized on the Consolidated Statements of Financial

Condition but also potential losses associated with unfunded

commitments and other contractual arrangements. The

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, is not reduced by

the amount of collateral held as part of a transaction with a VIE

and does not consider any executed forward sale agreements

where we have committed to sell ownership interests in any of

the investment vehicles.

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

where we have been involved in providing underwriting and/or

advisory services include:

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

price, corporate loans and ownership interests in a CLO;

•Warehouse funding arrangements in the form of:

◦Participation interests in corporate loans and commitments

to fund such participation interests;

◦Reverse repurchase agreements and commitments to fund

such reverse repurchase agreements;

◦Variable funding notes; and

◦Senior and subordinated notes issued in connection with

CLO warehousing activities.

•Trading positions in securities issued in CLO transactions.

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, (the “JCP Funds”, including JCP

Fund V (refer to Note 10, 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 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 February 28, 2026 and

November 30, 2025, our remaining equity commitment in the JCP

Entities was $8.8 million and $9.7 million, respectively. At both

February 28, 2026 and November 30, 2025, we also had

remaining commitments of $0.4 million, to a private equity fund

managed by us for the benefit of our employees. The carrying

value of our collective equity interests were $3.5 million and $3.4

million at February 28, 2026 and November 30, 2025,

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

carrying value and unfunded equity commitment. The assets of

the vehicles primarily consist of private equity and equity related

investments.

Other Investment Vehicles. At February 28, 2026 and

November 30, 2025, our remaining equity commitment in various

other investment vehicles was $188.2 million and $282.2 million,

respectively. The carrying value of our equity investments was

$1.72 billion at both February 28, 2026 and November 30, 2025.

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,

various oil and gas assets and energy tax credits.

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 February 28, 2026 and November 30, 2025, we held $1.39

billion and $1.06 billion of agency mortgage-backed securities,

respectively, and $183.4 million and $156.3 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.