Jefferies & Company is shaking up the ranks of the i-bankers who cater to asset management firms. Just a day after the top brass at Nuveen Investments said they are selling the business for a record $6.25 billion in cash and debt, Jefferies Group is making a play to gain entry to the asset management deal space by buying Putnam Lovell from National Bank Financial Group (NBF). The move reflects the increasing value of asset managers and easy liquidity to do deals.

Neither side disclosed the pricing or other terms of the deal, which they discussed on Thursday. Both Jefferies and Putnam Lovell acted as their own bankers on the deal. Torys LLC and Morgan Lewis were the legal advisers for Putnam Lovell and Jefferies, respectively.

Putnam Lovell NBF's Recent Deals Buyer Seller State Street Currenex Affiliated Managers Grp Chicago Equity Ptnrs Genworth Financial AssetMark TA Assoc. eSecLending Bank of Ireland Guggenheim Alternative Asset Mgmt Carr Sheppards Crosthwaite Ltd Rensburg PLC

For Jefferies, the deal is part of an expansion effort that is transforming it into a full service investment bank; the Putnam Lovell deal is its fifth pickup of a boutique i-banker in the past five years.

For the bankers at Putnam Lovell, Jefferies will become their third owner in just five years. Two former SEI executives -- Donald Putnam and Jeffrey Lovell -- created Putnam Lovell in 1987 and immediately gained prominence in providing banking services to asset managers as well as incubating fund businesses. The pair sold the business to Canada-based NBF in 2002. At the time of the deal, industry sources told The MFWire that the banking firm was facing a "cash crunch."

Jeff Lovell moved on to Lovell Minnick Parners, which was carved out from Putnam Lovell NBF in 2004 while Don Putnam went on to found Grail Partners in 2005.

Meanwhile, NBF has struggled to return Putnam Lovell NBF to the prominence that it had gained in the 1990s, even as the deal pace in the industry is again on the upswing.

One reason is that the market is growing more competitive as the value of deals continues to rise. In the Nuveen deal, for example, Goldman Sachs was the advisor to Nuveen while Merrill Lynch was the banker for Madison Dearborn Partners. The presence of the Wall Street giants is common in deals that rely on a cross-section of services and muscle to bring financing directly to the table.

Meanwhile, Goldman's banking team also grabbed the spot as bankers to the Skip Viragh trust, which is shopping all or part of its stake in Rydex. In past years, that deal fit the profile sought by boutiques such as Putnam Lovell or Berkshire Capital.

Jefferies, on paper at least, has the heft to build the Putnam Lovell shop into one that could compete head-to-head with Goldman, Merrill or Morgan Stanley. It will also be able to bring resources to bear that are beyond the scope of boutiques such as Berkshire and Grail Partners.

When the deal closes, Jefferies will add 21 i-bankers from Putnam Lovell to its existing team of 520 professionals. Putnam Lovell's staff is located in New York, London and San Francisco. Apparently, all of the locations will be maintained by New York-based Jefferies and the top executive at Putnam Lovell does not see the deal changing the way the firm operates on a day-to-day basis.

"We will continue to operate as we have been with heads in New York, London and San Francisco, who all report to Chris Kanofs," Aaron Door managing director at Putman Lovell, tells the MFWire.

Aaron Door Putnam Lovell NBF Securities Managing Director

Jefferies will also add a number of high profile clients to its roster, including: Allianz Group, Deutsche Bank, Massachusetts Mutual, The Royal Bank of Scotland and Prudential Financial.

Brian Friedman, chairman of the Executive Committee of Jefferies, stated that the deal will be "immediately accretive" and that the Putnam Lovell investment banking business will complement its current capabilities. 

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