Cantor Fitzgerald announced today that effective October 1, 2004, it will spin-off its global voice brokerage business to form BGC Partners, L.P. BGC will provide brokerage services to wholesale fixed income, interest rate, foreign exchange and derivative markets worldwide, including unparalleled pricing and execution, as well as access to electronic trading services and technology support from eSpeed, Inc. (NASDAQ: ESPD), the leading developer of electronic marketplaces and trading technology.
BGC will be a new private partnership with offices in London, New York, Tokyo, Hong Kong, Singapore, Geneva and Milan. Initially over 400 brokers will work for the partnership and its affiliates throughout Europe, the United States, and Asia. The firm will also seek to recruit, train and develop hundreds of new voice brokers as it expands in each of these regions.
Lee M. Amaitis will assume BGC's leadership as Chairman and CEO of the new partnership. Mr. Amaitis, who joined Cantor Fitzgerald in 1995 and has served as President and CEO of Cantor's European and Asian operations, played an invaluable role in the firm's strong profitability and the recovery of both Cantor Fitzgerald and eSpeed after the events of September 11, 2001. Mr. Amaitis has named several executives who will hold senior management positions of BGC Partners, including Shaun D. Lynn as President, and Daniel M. LaVecchia, as President, North America.
Cantor Fitzgerald has long been recognized as a leading inter-dealer voice broker in the fixed income market, following the vision of Cantor founder B. Gerald Cantor to build a brokerage business based on unparalleled customer service and innovation. In the aftermath of September 11, 2001, Cantor's business made a significant shift in the United States, placing greater emphasis on its institutional equities business and expanding into institutional fixed income and asset management. The spin-off of BGC Partners, named in honor of Mr. Cantor, will establish a new partnership focused exclusively on wholesale voice brokerage, made up of hundreds of talented voice brokers from Europe, the United States and Asia, building on the unmatched reputation for innovation and client service that Cantor Fitzgerald developed throughout the years.
Commenting on today's announcement, Mr. Amaitis said, "BGC will remain true to the original Cantor vision for a world-class voice brokerage committed to customer service and continuous innovation in the wholesale markets. Spinning off BGC will enable our team to seize the significant opportunity to expand in these markets, and allow our clients to benefit from efficiencies like seamless straight-through-processing of their transactions."
Products available through BGC will include fixed income (cash, spreads, options, and derivatives), foreign exchange (spot, forward, options and derivatives), asset-backed securities (cash, options and derivatives), and interest rate swaps (options and derivatives). With a focus on providing clients with the best execution and service possible, BGC will also employ eSpeed's trading technology to automate the confirmation, check out, and clearance processes.
Mr. Lynn added, "Cantor Fitzgerald's voice brokerage business has been widely recognized as a major source of liquidity and wholesale market expertise. We are excited about the opportunity to build on this solid foundation, and to expand BGC's global presence to become the leader in the global inter-dealer voice brokerage market."
BGC will participate in conjunction with Cantor Fitzgerald, L.P. in its pledge to donate 25% of its profits through 2006 for the benefit of the families of Cantor Fitzgerald, eSpeed and TradeSpark employees lost on September 11, 2001. To date, Cantor Fitzgerald, L.P. and the Cantor Fitzgerald Relief Fund have donated $140 million to help the surviving family members.