FOR IMMEDIATE RELEASE

Jefferies Commits to Jefferies Capital Partners IV

NEW YORK--(BUSINESS WIRE)--July 18, 2005--Jefferies Group, Inc. (NYSE: JEF) announced today that it has committed to invest $30 million in Jefferies Capital Partners IV L.P., a private equity fund managed by a team led by Brian P. Friedman and James L. Luikart.

In addition, a Jefferies employee fund has committed to invest $50 million parallel to the new fund, of which $25 million is a bank loan guaranteed by Jefferies. This fund is the fourth private equity fund managed by the team since 1994 and the first fund organized since joining Jefferies in 2001.

In connection with the investment, Jefferies will have an interest in the management fees and incentive fees of this fund and all future private equity funds overseen by Mr. Friedman. In exchange, Jefferies has agreed to issue between 400,000 and 650,000 shares of its common stock, depending on the threshold levels of the committed capital at the final closing of Jefferies Capital Partners IV L.P., subject to a claw back of up to one-third of the shares dependent upon the size of a subsequent fund and other contingencies. Jefferies had previously acquired an interest in the incentive fees earned by two of the prior funds.

"Since these private equity funds became associated with our platform in 2001, we have been delighted with this relationship, including the direct benefits, as well as the impact Brian has had on our overall growth and development," commented Richard Handler, Chairman, and CEO of Jefferies. "With this new fund, we cement our relationship for future funds overseen by Brian."

About Jefferies

Jefferies, a global investment bank and institutional securities firm, has served growing and mid-sized companies and their investors for over 40 years. Headquartered in New York, with more than 25 offices around the world, Jefferies provides clients with capital markets and financial advisory services, institutional brokerage, securities research and asset management. The firm is a leading provider of trade execution in equity, high yield, convertible and international securities for institutional investors and high net worth individuals. Jefferies & Company, Inc. is the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF; www.jefferies.com).

CONTACT:
Jefferies Group, Inc.
Tom Tarrant, 203-708-5975
ttarrant@jefferies.com

SOURCE: Jefferies Group, Inc.