Jefferies, Quarterdeck take advantage of defense rise. (Wall Street West).

JEFFERIES Group Inc., already having a solid year on Wall Street, recently announced a joint venture with Westside finance boutique Quarterdeck Investment Partners LLC, which is known for its expertise in aerospace.

Dot-coms are dead, telecom stocks are stuck in mud, but defense and aerospace stocks are soaring, given what appears to be a brewing perma-war against terrorists and the nations that support them.

The name of the joint venture is Jefferies/Quarterdeck LLC. In a nutshell, Quarterdeck, with years of experience in aerospace and defense, knows how to invest the money. Los Angeles-based Jefferies, with an excellent roster of institutional clients and its own fleet of stockbrokers, knows how to raise the money.

Both Jefferies and Quarterdeck would insist they have independent research and capital-raising abilities, but basically this is a marriage of brains (Quarterdeck) and brawn (Jefferies).

The market for defense-related initial public offerings is better now than at any time in memory, said Jon Kutler, Quarterdeck's chairman and chief executive. "We've seen more deals and IPOs filed (with the Securities and Exchange Commission) and completed within the last 90 days than we have in the last 10 years," Kutler said.

The venture boasts lead-manager status on one of those, the $97.8 million IPO filed by Dayton, Ohio-based defense contractor MTC Technologies Inc. on May 3.

In fact, the new defense environment may be even more conducive to investment banking than the old Cold War. In the days of the Iron Curtain, war planners considered massive tank battles in Eastern Europe and H-bombs. Not the sort of stuff emerging growth companies typically get involved in.

But today, the U.S. military is open to new weapons ideas, such as unmanned reconnaissance and weapons systems. The technology for drones that spot and fire upon enemies is heavy on advanced electronics, software and radar-evading plastics -- areas in which small outfits might make contributions.

With defense hot, Kutler has been hiring, recently adding Terry Lyons, formerly chief financial officer at Teledyne Technologies Inc., and Michael Misantone, a former Credit Suisse First Boston banker.

Jefferies' traded in the $46 a share range last week, near its all-time high, and up nearly 50 percent from the year-earlier level.

Contributing columnist Benjamin Mark Cole writes about the local investment community for the Los Angeles Business Journal. He can be reached at [e-mail].