BGC Partners, Inc. to Host Analysts and Investors Presentation on May

THOMSON REUTERS STREETEVENTS EDITED TRANSCRIPT BGCP - BGC Partners, Inc. to Host Analysts and Investors Presentation

EVENT DATE/TIME: MAY 29, 2014 / 2:00PM GMT

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CORPORATE PARTICIPANTS Jason McGruder BGC Partners - Head of IR Shaun Lynn BGC Partners - President Sean Windeatt BGC Partners - COO Graham Sadler BGC Partners Barry Gosin BGC Partners - CEO NGKF Michael Ippolito BGC Partners - Chairman NGKF Global Corporate Services Philip Norton BGC Partners - Executive Managing Director, eCommerce Jeffrey Hogan BGC Partners - Managing Director, Business Development Jason Chryssicas BGC Partners - IR Manager

CONFERENCE CALL PARTICIPANTS Jillian Miller BMO Capital Markets - Analyst Alex Kramm UBS Securities - Analyst Rich Repetto Sandler O'Neill & Partners - Analyst Niamh Alexander KBW - Analyst Brad Burke Goldman Sachs - Analyst Stuart Shikiar Shikiar Asset Management - Analyst Gerard Heymann JP Morgan Securities - Analyst Mitch Germain JMP - Analyst

PRESENTATION Jason McGruder - BGC Partners - Head of IR Okay, thank you, everyone. Welcome to BGC's 2014 Analyst and Investor Day. I'm Jason McGruder, head of Investor Relations. And I'm going to read the world's longest disclaimer.

During today's webcast, each speaker will be referring to presentation that includes information on BGC. This can be found in the Investor Relations section of our website.

Throughout today's webcast, we will be referring to our results only on a distributable earnings basis. Please see our most recent financial results press release for GAAP results. Please also see the sections of that press release entitled distributable earnings, distributable earnings results compared to GAAP results, reconciliation of revenues under GAAP to distributable earnings and reconciliation of GAAP income to distributable earnings for a definition of these terms and when and why and how the management uses them. Also see the reconciliation and discussion of GAAP versus EBITDA -- or adjusted EBITDA rather.

Unless otherwise stated, whenever we refer to the income statement items such as revenues, expenses, pre-tax earnings, post-tax earnings, we are doing so only on a distributable earnings basis.

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On June 28, 2013, BGC sold its fully electronic trading platform for benchmark U.S. Treasury Notes and Bonds to NASDAQ OMX Group, Inc. For purposes of today's webcast the assets sold are referred to as eSpeed, and the businesses that remained BGC that were not part of the eSpeed are referred to as retained.

The results discussed today generally exclude both our earnings and revenues from eSpeed unless otherwise stated on the slide.

Also the term Newmark Grubb Knight Frank is synonymous with NGKF or our real estate services segment.

I'll also remind you that the information on today's webcast contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended.

Such forward-looking statements include statements about the outlook and prospects for BGC and for its industry as well as statements about our future, financial and operating performance.

Such statements are based upon current expectations that involve risks and uncertainties. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied because of a number of risks and uncertainties that include, but are not limited to the risks and uncertainties identified in BGC's filings with the U.S. Securities and Exchange Commission. We believe that all forward-looking statements are based upon reasonable assumptions when made.

However, we caution that it's impossible to predict actual results or outcomes or the effects of risk uncertainties or other factors on anticipated results or outcomes and that accordingly you should not place undue reliance on these statements.

Forward-looking statements speak only as of the date when made and we undertake no obligation to update these statements in light of subsequent events or developments. Please refer to the complete disclaimer with respect to forward-looking statements and risk factors set forth in our most recent public filings in Form 8-K, 10-K, and 10-Q, which we incorporate today by reference.

I'm very happy now to turn our call over -- or the webcast over to our host, Shaun Lynn, President of BGC Partners Inc.

Shaun Lynn - BGC Partners - President Good morning, everybody, and welcome. As you can see, I'm afraid Howard Lutnick is not here today so you're going to have to deal with us.

Today, you're going to hear from our management team to give you a chance to actually ask us some questions and again try to (inaudible) answer most of the questions.

Today, we have Sean Windeatt who is our chief operating officer. We have Graham Sadler, our CFO. We have Barry Gosin and Michael Ippolito from NGKF. We have Jeff Hogan who is going to you about the regulatory environment. And we have Philip Norton who is our global head of e-Commerce.

So Sean will take you through the basic overview of the BGC financial business. Graham will take you through our financial performance and the cost savings that we made over the last 12 or 18 months. Barry and Mike will take you through the amazing work they've been doing on the real estate business which I think he'll show you just exactly what an amazing job they've done.

Jeff will take you through the regulation which is that minefield that we're in the moment which we just have to navigate our way through and Philip will be talking to you about our electronic trading capability and the future of it for all of us.

At the end of each, hopefully, we'll have some lunch and we can refresh you to go on to some Q&A and you can ask them questions directly at the end of each speaker or if you wish just at the end which may be easier. It's completely up to you.

And with that, I want to hand over to Mr. Windeatt who will take you through our financial services.

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Sean Windeatt - BGC Partners - COO Thanks so much, Shaun. What I like to do is just spend for 10 or 15 minutes just giving you a bit of an overview of BGC for those of you who are new to BGC, a bit of a history. And for those of you who know BGC well already, just to let you know what we've been up to over the last 12 months.

So BGC has -- makes its money from -- in three ways. On the financial services side, we have revenues over the last 12 months of just over $1 billion and with pre-tax margins of 12%. I'll talk a little bit more about that later on but that's something that would increase substantially over the last year.

Our key products which Shaun will talk about are rates, credit, foreign exchange, equity and then energy and commodity, one of our new areas which Shaun will go into a lot more detail later on. We still have just under 1,500 brokers in -- with over 200 individual desks around the world.

Moving across then to the fully electronic business, you know, despite the sale of our benchmark U.S. treasury business last year, our retained technology business generated in excess of $81 million over the last 12 months. And most importantly, those pre-tax margins of just under 50% have helped to drive our bottom line profit.

Now, you'll notice that retained technology pieces of the $81 million, it's still across the board in both interest rate, credit, FX, European government and what Phil will go over that later on is how we are focusing on still rolling out new technologies with our own proprietary network but, of course, many of you know we've invested more than $1 billion since the inception of BGC and continue to invest just under $100 million per year.

And then in the real estate side, you know, a truly remarkable performance, $690 million over the last -- over the last 12 months and it's difficult to believe it. We've only been in the business for just over the span of three years, and pre-tax margins of 11%.

Our key products there are sales and -- sales and leasing and the property and facilities management business. And what is -- what's particularly good is the fact that right now, all of that business is still -- predominantly all of that business is still voice-based so giving tremendous opportunities of all growth and, of course, that business right now is purely U.S.-based. I'm sure both Barry and Mike will talk a little bit more about that later on.

So BGC is a diverse company, certainly diverse by geography. I mean I can remember either Shaun or Howard or even myself sitting up here or standing up here in the last five years saying how we were underperforming or undersized in the U.S.

Well, if you look at that now, the U.S. now accounts for 60% of our revenue. Admittedly, a lot of that has been driven by the growth in real estate that as well has been incremental hires that we made in the financial services sector.

In the business representing just under a third in Asia Pacific 10%, so for me, that shows the diversification that we've made in terms of geography and the significant opportunity that we have but perhaps a few highlights to note here in the U.S., the recent addition of the Houston office and in Asia where we've opened up in Shanghai to compliment our regional office in Beijing. And Shaun will talk a little bit more about that later on.

So let's talk about the diversification. In fact, we now have businesses across financial services and real estate. Let's take a look at the performance and how it improved over the last 12 months.

Despite the sale of eSpeed, our financial business is down just 2.2% during the challenging times over the last 12 months. And statistically the particular driver is the pre-tax earnings margins increasing from 13.3% to 15.1% and, of course, in absolute terms as well it's $163.4 million.

And I think that's down to all of the work that we've done in both the cost savings initiatives in terms of non-compensation and non-broker costs and that fact that we've had to right size our business for the current regulatory landscape.

Then real estate, obviously growth in both revenue and in pre-tax margins, pre-tax margins is now up from 8.2% to 11.2%, and, of course, the growth that you've seen. And it's perhaps worth noting at this point that that revenue growth does not include, of course, the pending -- our latest acquisition of Cornish & Carey.

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I think also we mentioned -- we mentioned a number of times -- could we come back to the slide again? We also mentioned that real estate compliments our financial service business. Real estate tends to be strongest in Q4 and financial services the weakest in Q4.

And on the flipside, financial services is strongest in Q1, real estate the weaker -- tends to be weaker in Q1. What you've now seen with our Q4 numbers and our Q1 numbers is the consistency of earnings. And I think actually that differentiates us from our other IDBs.

So there's been a lot of talk and Jeff will talk a lot about this later on with regards to the regulatory landscape and Dodd-Frank and swap execution facility.

But talking about diversification, so it's just over 1/3 of our business is in our real estate and just under -- just under 2/3 is financial services and let's just look and see what is currently affected by Dodd-Frank.

Right now, under 15% of our financial services business and actually less than 10% of our overall revenues, so on the -- just under $1-3/4 billion of revenue only 175 million is actually being currently affected or could be affected by the SEF rules as of the end of this year.

Okay, having said that, $175 million is a big number. So we'd always said that we believe the regulation will be neutral to positive. There have been many, many changes over the last few years and as I said, Jeff is going to a much more detail.

I thought it was worth looking at -- I think about an opportunity. We go back to 2005 and look at our electronic U.S. treasury business. Back in 2005, 90% of the volume in U.S. treasury business for BGC was by our traditional banking clients.

If we fast forward to 2013 just before we sold our benchmark treasury business, 70% of our -- of those customers were coming from the non-dealer community. So Shaun will expand on this a little bit later but for me, that shows the potential opportunity that we have that have come about in the post-Dodd-Frank regulation.

So what's been driving our growth, well, here is the history of accretive acquire -- accretively acquiring new businesses. And most recently, a number of people within the audience here have commented on we've seemed to being focused on all real estate.

But it's absolutely true in as much as on the Cornish & Carey transaction that we've announced just recently. That's one -- that's going to add significantly to our revenue for the real estate business.

But we've also been busy in financial services as well. Back in March, we announced the acquisition of the HEAT Group that Shaun will talk about a little bit later. And then on May 9th, the acquisition of Remate, one of the leading brokers in Mexico and once again as Shaun said, he'll go into much more detail there.

BGC over the last 10 years, it's focused on small bite size companies that we can plug into our network. They benefit from the fact that they have our technology, our liquidity and, of course, our financial muscle where they can continue to grow. And then Shaun will talk a little bit more about that a little later on.

So that's been a driver. If you think about it, BGC is actually only 10 years old in October of this year. Let's look at the growth in revenue we had over the last -- over those 10 years.

From just under $500 million back in 2004 to just under $1-3/4 billion in 2013, and, of course, this excluded our latest acquisitions, admittedly -- admittedly, you can see that the revenue from our financial services businesses tailed off in 2012 and 2013.

But we're not tied or limited to financial services. Essentially, we were a brokerage company. It's not a coincidence that we went into the real estate business and it's really complimented our financial services business.

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I think as market trends continue -- get slightly better over the next few years, we can -- we will see that 15% growth we've averaged over the last 10 years. We see that continuing for the foreseeable future.

So as well as -- as well as the acquisitions, headcount growth clearly drives our revenues. And if we look here, 518 brokers when we started just 10 years ago back in 2004, up to now, just under2-1/2 times in brokers as of today.

And I think the particular interesting statistic here is from financial service perspective, we're at 1,700 brokers back in 2012. If you could argue that if one side of management is in a growing environment, it's another part of the management that has to check back and make difficult decisions to close desks that aren't making money and the fact that you've seen our headcount in financial services go down to about 1,500 that I was talking about in a second, the key statistic is revenue per head.

So broker productivity, perhaps no surprise to you that our real estate services business if you think about Q4 of 2013 compared to Q4 of 2012, up 17% in revenue per head, and Q1, as we announced from our earnings call just recently, up at huge 47%.

And it's worth noting, that was done at exactly the same number of brokers, roundabout, roundabout just under 900 brokers, so we have 150 out of the low performing brokers and 150 in, added in better-performing brokers and 150 reduction of the number of lower performing brokers.

And that contributed overall to an 11% increase in revenue per head and that's one of the key driving factors to why overall profitability has grown substantially over the last 12 months.

And to many of you, here is a slide that many of you will have seen before which is the fact that BGC structure combines with one of really the best aspects of the private partnership within the course of inter-public company.

And I think this has been -- this is a unique selling feature for BGC and that's the reason why we've been able to hire, acquire, retain talent and, of course, -- and, of course, make accretive acquisitions.

But if we go back to 2008, the ownership of BGC is 50% owned by Cantor, just over 1/3 by the employees and 15% by the public. If we fast forward today, 44% is now owned by the public predominantly at the expense of Cantor sale and still 33% is owned by the -- by our broker and manager employees.

Why do I think that's important, well, because that means that the interests of the employee and the brokers really are aligned with the shareholder because they can pay the fair percentage of what they produce, they also get paid, of course, when the company makes profits, they get paid for converting business electronic being exactly what the company wants it to --wants them to do, and, of course, they get paid by the appreciation the same as you do from dividend and the appreciation to share price.

And I think -- I think that's actually been -- so that has been a driving force in why we manage to keep our cost and share. Broker compensation is, of course, -- is, of course, the major expense for our business and we currently have one of the most -- one of the lowest and most competitive front office payout rates.

And I think the reason for that -- reason for that is because of the partnership structure. We have 70% of the revenue have signed -- in our financial services business have signed new long-term contracts.

And those contracts allow BGC because the broker share, the cost with BGC, they had allowed us to lower the compensation rate by therefore driving our margins up and increasing -- increasing our bottom line.

And also it manages to mitigate if we should add any incremental cost desk, for example, regulation, how we can share that cost to the broker. But, of course, the broker, because they don't get paid in just one way that they are interested in the yield and the dividends and they're interested in the stock price of our shareholders.

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Now, of course, the marketplace has been changing from a financial service perspective. I don't think we don't expect to see that improve certainly throughout the balance of 2014 and into 2015.

But in the environment that we're in where our volatility and volume remained subdue, yes, that affects the rates and the credit and FX markets but conversely as Barry will talk about later on, this combination of the current marketplace had led to a strong tailwind for our -- for the very good capital markets and the leasing side of NGKF business.

But I think a critical component of why we've been so successful and it's a slightly different take on the slide that a number of you will have seen before and I think part of the success is clearly based on the -- on the experience of the executive and business management team.

But what we thought we'd share here is, it's the continuity of services of the management team. So from the executives, as Graham there for five years, myself for 17, obviously to Howard at 30 years.

So it's the continuity of that -- of the management team since BGC's inception back in 2004 that I think has led to the growth and development in the -- during the various marketplaces.

And that stretches to the business management team here. You know, once again, it's perhaps worth noting, BGC as you remember, which is 10 years old and yet, you have in the financial service management people who have been with us literally since the start of BGC coupled with -- coupled with some of our veterans such as the -- such as Phil Norton who we'll hear from today, he has been with the company for 25 years.

And again, if you look the real estate management, very much within the ethos of the company, of course, they'd only been with BGC for three years but they may have been with their respective companies that we purchase them from for the minimum year of 14 years up to, of course, 35 years of Barry.

So when we talk about the fact that -- you know, when we talk about the fact that we -- acquiring our business-- acquiring businesses and the accretive acquisitions we made, it's all of not just about the business itself, it's about the people within that business.

So I think just to conclude, but BGC has its -- it's not brokerage firm, it's diverse, it has two segments both financial services and real estate, so by definition, diversified by product category and geography as I showed with significant room to grow.

We continue to make accretively hire and acquire and I think my personal opinion is which Shaun will speak about a little bit later on, is the fact that -- and there are more and more opportunities within this -- within the landscape to make further acquisitions.

But the acquisitions of BGC may have to be right for BGC. They -- all of it -- all of the businesses that they have acquired are now linked to revenue and managers remained within the business and they get paid and earn-out linked to performance.

So the management team that we have, of course, has that ability to attract and retain the key talent. And right now, we have -- with our current stock price as of yesterday a yield at 6.7%, because of all of the cost saving issues we put in, all of the changes we put in place as well as the growth of our real estate business, that's why we reiterated in the call that our current dividend we expect to be maintained certainly for the foreseeable future.

So with that, thanks for listening, I'd like to hand over to Graham.

Jason McGruder - BGC Partners - Head of IR Just before Graham starts, as Shaun said -- Lynn said, does anyone have a question for Windeatt before Graham goes up? All right. So we'll go straight to Graham , our CFO.

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Graham Sadler - BGC Partners Thank you, Sean, and good morning, everyone. What I like to discuss today is how we believe our underlying strength gives us growth opportunities to increase both shareholder and bondholder value. Specifically, I want to look at the quality of our earnings streams, the strength of the balance sheet, our expanding margins and the value of our underlying assets.

Firstly, picking up on the diversification theme mentioned by Shaun, when BGC was formed in 2004, around 70% of revenue excluding eSpeed was generated in Europe and now it's down to 30%.

Our expansion into real estate since 2011 has not only boosted U.S. revenues but provided a real product identity in that region which we'll look at in a minute. Overall though, we have no significant dependency on any one geographic region.

So we'll now look at the product split. This shows the split of segment revenues from 2012 until now, the blue segment being real estate. This is growing from zero in 2011, so 36% of the business for the trailing 12 months to Q1 2014, and provides a natural diversification to our financial services business.

Within the financial services, we have a wide array of non-bank and non-financial customers particularly in our fast-growing energy and commodities business but Shaun will have more on that later on.

So sticking with real estate, NGKF revenues are also diversified by service offering. We have the transaction-based businesses which is the green center on the slide which includes the normal brokerage business but also includes the higher margin capital market services.

And nearly 40% of our real estate revenues come from more recurring sources such as global corporate services and property and facilities management. Barry will discuss this in more detail later.

But this mix in revenue streams thus tends to reduce earnings volatility albeit with lower margins. Indeed the fastest-growing parts of our business have been our largely recurring global corporate services business as well as our transaction-based but higher margin capital markets business.

The success of these businesses has been a large part of why we believe we're going to have stable year-on-year growth while increasing our margins over time.

So now, looking at the customer base, around 40% of NGKF revenues come from landlords, real estate investors and the like. And our non-real estate customers are quite diversified ranging from auto manufacturers to engineering firms, to oil and gas companies.

If I look at the top 12 customers, there are only three banks. So while we're talking about real estate, I just like to make one last point. We appreciate that EBITDA is a widely used metric within the real estate industry.

This slide compares to distributable earnings for NGKF to adjusted EBITDA together with the corresponding margins. And you can see that it has been broadly similar. The reason for this is that NGKF like other real estate services companies has a relatively small amount of depreciation and amortization. But the result is that we think DE is a good proxy for EBITDA.

You can also see our real estate services margins are in line with the seasonally similar margins with industry peers and we expect to expand our margins over time as we continue to grow revenues and our scale.

Despite our increasingly diverse customer base and revenue streams, the performance of our large banks is often viewed as a proxy by our performance. The result of this is that our stock trades in tandem with bank stocks sometimes with the correlation approaching 100%.

This chart in the next shows that historically high correlation between our stock price and in this case, Non-U.S. banks, and in this case, with U.S. bank stocks. Over the next few slides, we'll try to demonstrate why we believe we should not be correlated with the banks.

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If we look at the correlations since 2007 of our revenues which is the purple one to banking revenues, the red and blue lines, you can see that we're far more stable. In fact, over the past seven years, investment bank revenues have a negative correlation with our revenues.

Even if we were to exclude NGKF, the correlation will be nearly zero. So why is that? Partly and more recently is due to the diverse revenue sources from NGKF. In addition, in financial services, unlike banks, we do not loan money, we don't take positions or generally use our balance sheet to make money.

So although banking revenues and our revenues are driven by market volumes. Banking revenues are also determined by factors such as mark-to-market, bid-ask spreads and debt valuation adjustments with industry volumes being only a small component.

Consequently, we think the better metrics are largely volume-related such as those included on the slide. And you can see correlation to our revenue is much stronger.

Barry will give you insight into the industry metrics most relevant to our real estate business so now I'll turn to our balance sheet.

As a broker, we have a simple business model with low risk with essentially no leverage. We have minimal securities trading inventory and virtually no position risk with the consequent funding and valuation issues.

We do not use our balance sheets to make money and we have no margin lending. So looking at it in more detail, this is our balance sheet at 31st of March 2014. It shows total capital of 747 million and total debt of 408 million.

The cash on the balance sheet is 717 million which includes 37 million of securities owned which is primarily treasuries held from liquidity purposes and 42 million of marketable securities primarily in that NASDAQ OMX stock.

We're a little or no proprietary positions and no mark to model assets. The majority of our balance sheet is self-funding versus receivables and broker-dealers, versus payables to broker-dealers and accrued commissions versus accrued compensation.

We do not use our balance sheet with our proprietary trading or for lending activities. And so profitability depends on absolute level of capital.

With distributions and taxes relating to the eSpeed sale now are largely paid, we had $717 million of cash at the end of March 2014 which compares to 370 million in the year before.

This substantial cash surplus is only earning around 20 basis points. Consequently, we have tremendous opportunities for the accretive use of that cash including acquisitions, hiring producers, repaying debt and repurchasing common shares and partnership units whilst maintaining our common dividend for the foreseeable future.

I would also like to emphasize that the balance sheet excludes the over $500 million we expect to receive in NASDAQ OMX stock over the next 14 years.

We talked about accretive acquisitions. I thought it might be useful to look back at the specific example. At the end of 2012, we bought Frederick Ross which had a great brand name in the local Denver region.

Partly from the excellent management team investing in the best brokers and providing them with our global platform, revenues and profits nearly doubled in 2013. And we expect our internal rate of return to constantly exceed our cost of capital and our current return on cash.

We expect to be able to replicate the essence of this success story across other acquisitions across out real estate and financial services businesses.

So looking now on debt position, as of 31st of March 2014, our long-term debt was 408 million, down 39 million from a year ago. Our next opportunity to reduce debt is in April 2015 when the 150 million convertible matures.

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Clearly, our cash balance is 717 million comfortably exceeds our long-term debt obligations. I like to repeat that the 500 million of stock is still due to the NASDAQ also exceeds our long-term debt obligation.

So moving on to our debt equity ratio, this has been in the 55% -- 51% to 55% range since the second quarter of 2013. This is a significant improvement from 89% at the end of 2012. So now, I'd like to look at how our margins can improve over time.

The bars on this chart represent total firm revenues split between financial services in blue, real estate in red and corporate in green. Also showed is eSpeed revenue in yellow. The green line is distributable earnings margin.

You can see that BGCs have relatively flat revenues over the last two years. In particular, if you look at Q1 '13 versus Q1 '14, although revenues are down slightly, margins have increased from 10% to 13% despite the sale of eSpeed which had three times margins at around 60%, and the higher proportion of revenues coming from the real estate business.

So how did we achieve this? We made significant progress with our cost saving initiatives. We'll grow our more profitable return on electronic businesses. We've also had growth in broker productivity in both businesses but in particular, real estate which has led to a significantly improved margin in that business.

Shortly, Barry will discuss the developments within the individual businesses but I just like to check and look at our electronic business and the cost cuts.

This chart shows the growth in the absolute value of our portfolio electronic revenues as well as the growth as a percentage of our overall financial services revenues.

Over the past three years, our fully electronic business has increased from 4% to 8% as a percentage of financial services revenues. This growth coupled with a higher margin nature of the electronic business helps drive our incremental margin expansion.

We believe that as BGC continues to grow its business by both acquisitions and by expansion of existing business lines, our in-house technology allows greater opportunities to turn voice/hybrid revenue into higher margin electronic revenue.

This slide will be familiar to some of you from our earnings presentations, however, today, this shows purely financial services and compared to revenues and margins, our fully electronic business against our voice and hybrid business.

If you look at Q1 '13 versus Q1 '14, what you can see is firstly that the margins for our fully electronic business are stable at around 53% to 54% despite the sale of our eSpeed business. But secondly, there's been growth in margins in the rest of our financial services business from 14% to 18%.

So then moving onto the cost saves, BGC remained on target to reduce overall expenses by $100 million annualized by the end of 2014 as compared to the second half of 2012 run rate.

If we just look at non-comp expenses for distributable earnings, on the left is annualized second half 2012 and on the right, annualized Q1 2014. The green boxes in between show the cost savings by P&L line item. You can see that significant cost saves have impacted all expense types.

So now, if we look at the various components of our business, as we have discussed, we have $717 million in cash and debt of 408 million. We have over $500 million in NASDAQ stock coming in over the next 14 years.

We have a fast growing real estate business, a high margin fully electronic business and a voice/hybrid franchise that generates in over $1 billion in annual revenues.

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Given industry average multiples, one could argue that our stock should be trading 30% to 40% higher on sum of the parts basis. We believe that given these assets, there is tremendous value embedded within BGC.

So to summarize, we've demonstrated how the geographic diversity of our earnings streams coupled with growth in new products particularly real estate, with its more stable revenues. This is due in part to the fact that we don't take proprietary risk positions or otherwise use our balance sheet.

We have a very strong balance sheet with significant cash excesses comfortably over our long term debt obligations. We have expanded our margins as a result of not just our cost savings initiatives but significant growth of higher margin fully electronic revenues and increased broker productivity, and have very valuable underlying assets between real estate and financial services both voice and hybrid.

Taken together, we have a very strong platform for increasing shareholder and bondholder value through a combination of repaying debt, buying back common shares and partnership units, investing in the business including through profitable hiring and accretive acquisitions, all while having enough funds to maintain our dividend to the foreseeable future.

Finally, before we move on to Shaun, we are pleased to reconfirm our existing guidance regarding our second quarter 2014 outlook and we intend to update this outlook around the end of June. Thank you very much.

Jason McGruder - BGC Partners - Head of IR So before Shaun comes up, again, we'll have time for questions. Okay, so Jason, can you grab the other microphone and I'm going to go to Rich while Jason grabs the other microphone.

QUESTIONS AND ANSWERS Rich Repetto - Sandler O'Neill & Partners - Analyst Two questions. You list four things you want to do. You definitely emphasized the level of cash yet coming in that you have now plus coming in with NASDAQ OMX stock.

So can you go to those four alternatives and sort of prioritize and give us a better look on what we expect in regards to the uses of cash rather than real acquisitions, hiring, to repurchase of debt and...

Graham Sadler - BGC Partners Well, you know, we have -- the next debt that is comes due, April 2014. It's also on the list. We are, you know, opportunistically looking at acquisitions and obviously we are selective of what -- you know, what we'll take on. And when opportunities arise, well, definitely -- we will definitely take them and use our cash.

Rich Repetto - Sandler O'Neill & Partners - Analyst So was there any internal guidelines that you want to use to determine cash for acquisitions versus the purchase -- there isn't...

Graham Sadler - BGC Partners No, not really, not. You know, we look at things opportunistically for what is provided and those that's accretive to shareholder value.

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Rich Repetto - Sandler O'Neill & Partners - Analyst Okay. And one follow-up, so this is on slide 41, this is about your cost and taking on the cost from the second half of 2012 run rate. So that would include eSpeed. You'd have eSpeed in 2012.

Graham Sadler - BGC Partners Yes. That's right.

Rich Repetto - Sandler O'Neill & Partners - Analyst So if the -- I guess one question, what is that without eSpeed and then is the target to take down costs just in non-comp?

Graham Sadler - BGC Partners No, no. The -- there are certainly targets to take down compensation-related costs as well. I'd only focused here on non-comps because it's going to be easier to see but there are also compensation savings as well.

Rich Repetto - Sandler O'Neill & Partners - Analyst So the 100 million will be the combination of both?

Graham Sadler - BGC Partners Yes.

Rich Repetto - Sandler O'Neill & Partners - Analyst Is there anything to evaluate given all the acquisitions?

Graham Sadler - BGC Partners Well, that's something that to consider, yes, because when we add on acquisitions, it's going to be a hard thing to evaluate.

Jason McGruder - BGC Partners - Head of IR There's a footnote at the bottom saying this is excluding acquisitions - to us so it's clearly a combination of both. So given the current business, 100 million less.

Niamh Alexander - KBW - Analyst Thanks. Hey, Graham, with regards to cash again and can you give us a sense of your uptake for repurchases because you have a lot of cash, you don't need that much. Your purchases have been accretive.

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And then secondarily on your dividend policy, you said you maintained the dividend for the foreseeable future? Historically you paid out, you know, pretty much most of what you've earned. Your earnings seemed to be moving a little bit higher here so help us think about on the appetite to increase that?

Graham Sadler - BGC Partners Yes. I mean we certainly look at that. I'm not now making any statements about, you know, whether that may increase in the future but what I'm saying is that there's a floor to it but we're not -- but certainly, I don't anticipate it coming down.

Niamh Alexander - KBW - Analyst What was the policy before? Was this paying out 80% or...

Shaun Lynn - BGC Partners - President You know, 80, 75.

Graham Sadler - BGC Partners Yes.

Niamh Alexander - KBW - Analyst I believe 75% and right now, you're kind of still within that policy or in the lower range?

Graham Sadler - BGC Partners It's in the lower range, yes.

Niamh Alexander - KBW - Analyst Okay, Okay. Fair enough. Thanks.

And then on the FX electronic and maybe this is something for Shaun later, but exactly what's in that, you know, 81 million of electronic business (inaudible)? I'm just trying to separate out, you know, what might be separately identified -- identifiable business within that? I know some of it is FX, I don't know if you can -- we can put that later or...

Shaun Lynn - BGC Partners - President We should do that later. We don't -- we don't break it out at the moment.

Jason McGruder - BGC Partners - Head of IR Well, actually, you will find our later.

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(MULTIPLE SPEAKERS)

Niamh Alexander - KBW - Analyst Deep voice, of course, coming from the back...

Shaun Lynn - BGC Partners - President We anticipate -- exactly.

Jason McGruder - BGC Partners - Head of IR A reason to stick around. Anyone else before we move on to Shaun and -- all right. So for the transcriber, the first question was Rich Repetto, Sandler O'Neill, the second question was Niamh Alexander spelled N-I-A-M-H, Alexander of KBW. presentation

Shaun Lynn - BGC Partners - President Okay. I'd like to just talk a little bit about the landscape. Most of you that have been road shows before have been unfortunately bored by the slide which should be the background of what we've done over the years and how we've operated.

Traditionally, BGC has been a pure broker. As Graham would say, we don't take positions, we don't proprietary trade and we do trade in between the banks -- investment banks and trading firms. We send the bill out for 70% of our revenue and we trade match principal for 30% without taking a risk.

Now, we see the world changing and that's what I want to talk about how the landscape moving on is because of Dodd-Frank, because of Basel III and the changes in the landscape where the banks have put -- the traditional banks are pulling back to reorganize themselves and we all see, we're seeing a huge influx of new potential clients.

Now, the way the market is evolving today, the banks are still servicing the top tier customers, but the tier four, tier five customers, tier three customers, they're not enjoying the same sort of services they used to have because the banks are no longer prepared to commit their capital.

So from that standpoint, we see this as an opportunity for us to moving to fringe banking and it's not taking risk but it's that mutually advisory and more of an ancillary businesses that that banks traditionally do.

So we would, you know, basically become advisory experts and moving to some of that banking that is probably going too much detail, Okay, but it's not taking positions. So what we've tried to do is we thought how do we move forward, how do we move inside this landscape.

And what we've done, we decided that because of the breakdown in traditional marketplaces as it's not just happened in moving to Dodd-Frank businesses but it's a ripple effect across all of the businesses.

There's a breakdown in credit, in FX, but now, the banks are stepping back so drastically but there's more customers coming to the fore. And for us, we look at the landscape of the overall marketplace.

So the top 20 banks had turned over with over $176 billion of revenue. The brokers, the traditional IDBs, have around $8 billion. Now, for us, we sit there and say, well, we know that the banks are pulling away from their traditional marketplace and so the banks offer less liquidity and we see

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©2014 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 29, 2014 / 2:00PM, BGCP - BGC Partners, Inc. to Host Analysts and Investors Presentation the -- the traditional customers such as hedge funds and pension funds coming into our traditional marketplaces looking for liquidity of which we could give it from technology, from pure brokerage where we have over existing 1500 brokers that are talking to the marketplace all day and every day.

And so from that perspective, Dodd-Frank has been the major ripple effects across the whole marketplace. It's shaken the foundations of the market. It's giving us growth opportunity, it's giving us central clearing, it's giving us forced transparency.

If you're mandated by the government, and, of course, it's going to spread throughout the whole globe. It's not going to happen tomorrow morning but it has absolutely rocked the foundation of the marketplace. Jeff is going to talk more about the regulation, I understand.

But from that standpoint, we see that now, we're going to have the opportunity to broker a much wider audience than we ever had before. So we used to look like this. That was the past now as far as we are concerned.

The future is going to be that we can talk to anybody. If they wish it and the market wishes it, we can give it to our technology, voice broking - we can expand that a little bit.

So yes, the market is going to a huge headwind with regards to regulation. Yes, it's taking a huge amount of money, lots of time, lots of effort from everybody but it has forced the market open and we're going to take full advantage of that and growing that business within there.

I mean we consider it, $176 billion of the top 20. It's all of opportunity for us. So this is the slide that Sean spoke about, is an example of what you've done in the past. This is how we used to look in 2005. This is our eSpeed U.S. treasury business.

Here, you can see 90% of the business is brokered by the dealer community -- traded by the dealer community with us, 10% is non-dealer. And now, in 2013, fast forward until 2013, just before we showed it to NASDAQ, 70% -- 70% was a non-dealer community, 30% was the dealer community.

The driving forces of that, centrally cleared, liquidity, fully electronic trading, full transparency. That is what drove the market to this point. So we've done it before. We've seen it, we've been there and we know what we can do.

And Dodd-Frank has and got the regulation and Basel III and everything that's happened in the marketplace has just had ripple effects across everything.

So looking at our landscape, our financial landscape as it is today, as you've heard from us already a lot and I'm afraid you're going to hear it quite a few times, is about regulation, Dodd-Frank, Basel III, ISDA fix, LIBOR, all these other things that have happened to our market within the last 12 months then had a huge headwind.

Once again, we see this as an opportunity. We continue to diversity our business. We continue to grow in all of these sectors where we can. We've upgraded our staff. We've seen this as an opportunity. We don't run away from it. We've seen it as a positive.

We've taken more of the market electronic and even now, the headwinds of the market where volatility is low and the banks cut back, we run into that, grown our business as best we can, upgrade our staff, put them on longer contracts, lower the payout to the brokers because they are aligned with you. And it's keen to understand that we're the only broker that have that, we're the only broker that has shareholders that go up and down the lift every day in our company.

So if you look at our margins of trailing 12 months, it's increasing 13.4% which is over 15%. I will quickly touch on rates because that is the one which is in the eye storm at the moment. We -- Jeff will talk more about the challenging landscape.

But what actually happened to us and many others and (inaudible) the whole market, the money, time and effort we've had to spend on preparing ourselves to be compliant, to build a SEFs, to invest their money, educate our staff, educate the marketplace has been a huge drain on every -- I think every company within the marketplace.

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And, you know, it's great that it's behind us and the fact we're done with this and we have, you know, positioned ourselves really, really well but you're going to see and you had seen already and some of the traditional SEF - or not traditional - the new SEFs that have come to the market that don't have 1,500 brokers pushing the market electronic and pushing the market with regards to illiquidity are struggling.

We think that's going to continue because the regs -- the regs are being pushed out all the time. It's been a huge drag on the market and it's going to continue. Regulation is here with us. You know, these guys are changing and new regulations come along, all of that the way through to 2017.

It's not going to get easier. You're basically got to be prepared, you're going to have technology, you're going to have money, you've got to be able to be in a position to build going into this.

Now, banks give us opportunity to acquire staff, to acquire companies. Every time we are out there looking at looking at companies, we are out there a lot in the financial world. Companies come and talk to us about the same thing.

Technology is expensive, regulation is expensive. They can't compete. And that is -- that is going to be getting louder and louder and we are going to take full advantage of that opportunity.

So rates being one. Credit, Basel III, has been huge headwind. No one is holding positions anymore. Once again, you're seeing us, you know, grow our client base which we're doing and that's going to continue. I don't think it's going to be, you know, changing any time soon but in full year 2013 year on year, we're down by less than any of our other competitors. Electronic revenues and credit will were up over 50%. Philip will talk more about that.

In FX -- in foreign exchange, getting back to your -- the point is our electronic FX has, it's gone from strength to strength taking normal market share from our major competitors.

(inaudible) FX, FX options have been in a huge headwind. We're one of the market leaders probably but it's hindered our performance in FX. I think you...

Jason McGruder - BGC Partners - Head of IR Just to clarify, when you said electronic FX was doing great, you know, he meant Spot FX.

Shaun Lynn - BGC Partners - President Thank you, Jason.

Let's talk about equities and other asset class. This slide, and (inaudible) asset class, it's includes our commodities business. So what we can announce today is that we're going to strip out commodities going forward now to make it easier for you and we think it's now the size of revenue that we think we should be stripping this out.

Equity derivatives, we have very strong equity cash we are not. We will grow and build that well looking to acquire into that space aggressively.

With regards to commodities, we made some huge plays in growing a global footprint and you should expect to see us acquire and grow. I know that's what we keep saying but it is so true. We are out there all the time and I'll talk more about that as we go into commodities.

So as we say, BGC is really 10 years old. We've done a huge amount in 10 years. You know, I have been here a hell of a lot longer but it is only 10 years old. And so to actually build the footprint in the commodities market which is a very, very old market, one of the oldest markets out where you have seasoned professionals which we're up against, it's difficult.

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And we've managed in the last three years to do that. We've started in Asia where we bought Radix And we continue to grow and build that and grow that footprint.

But the fundamentals of the marketplace are very strong. The market has been growing and growing and we're moving into a good market and that's refreshing that we are outpacing the marketplace as you can see from the slide here.

The truth is it's from the small beginning. So, yes, you should expect this to continue to grow incredible pace but it is from a small beginning.

Here is our -- I don't know who these people are, they ,may just say they work in the market as well. But the small sliver of this market, $31 million in 2013, we put that out there just to show you the sheer size of the market and to be absolutely honest, there are so many other companies that are circling around this pie chart, there's 100s that trade within the commodity market and the energy market.

And we see this as such an opportunity for us. It's not just the traditional banks that we dealt with. That is also oil companies, airlines, car companies. There are so many different client bases that we can grow and build or move into.

We will always hire the best talent and we were speaking about what are we going to do with the money, you know, our full focus is going to be on the growth of the company at BGC. So that's where we can get true value, accretive acquisitions in real estate but also in financials.

You can see the potential synergies between even real estate and energy. You think about the Empire State Building, the leasing of the Empire State Building, they need to buy their electricity in some way. Yes, we will work to use our full synergies across our landscape as best we can to make the most of that for our companies.

Now, this next slide just shows you potentially next year the -- now, the projections of our competitors and from us, they're our trending -- trending landscape towards 52 million this year based on first quarter actuals, so trending nearly 70% higher than 2013 and 2014. And the other IDBs is just based on your estimate actually.

But it gives you indication of our growth and our potential. And, of course, we're not happy with this because we are going to continue to grow our business even more. We have a separate team within our company, they are just actually focused on the growth of that company because you see this as a massive opportunity footprint for us.

Briefly to talk about our footprint which I'll keep going on about, it came because if you try to attract the company to show themselves to you, they're going to know you, they're going to understand who you are.

You know, in the traditional financial market which is an IDB market, yes, they've heard of us and I would hope Barry haven't really heard of BGC in reference to the fact that it wasn't for Howard Lutnick.

But if you're trying to attract into new asset class, you've got to be known. So our footprint is incredibly important to us. So here, you've seen we've grown our footprint in the last three years, so we're now a global player.

And I'm trying to get across the sheer size of the market, just for fun, we put a barrel of oil up there, it's not the most exciting slide but it just give you indication of in the green are the products that we actually broker in, the red or pink is the market that we're not in.

And each one of these markets has listed products, has physical and the adoptions. We know this company that is just in oil alone have really has over $100 million and good profit to the bottom line, experienced but need technology, that need to grow and expand its other sectors, where they can't go into. They can't do it from where they are today.

This is just some of the other sectors that I thought I'd put on the slide to show you these are the sectors that we actually are well groomed today and the further opportunities there. But it just gives you indication how big this market is. We see this as the next big growing asset class for us. And then when you look at natural gas, iron ore, palm oil and coal which we don't do at all, once again, huge growth opportunities.

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Typically, one acquisition that we made at the beginning of the year, or sorry, in March actually - Heat. Heat is a great opportunity for us because it got us into the electricity market. The executive of that, that's been in charge of the company, Vincent Crescenzi, is a world-class, renowned player in the energy market with a great management team within there with offices in New York, New Jersey and Florida.

The key to this was that it was expanding that footprint in as I kept saying to you and he will attract the right people to go and work with him and also companies for us to acquire. They broker regional term power, physical and financial natural gas and physical and financial options.

The key to this is that we will give them the financial muscle, we'll give them the technology to grow and build to expand and also complements the renewable energy business that we have as well.

So with regards to our growth, as you can see in the last few years, it's from small beginnings but it's good growth or you can see in the first part of 2014 compared to the first quarter of 2013 the 78% growth, once again, from a small number. But we have that footprint and we are going into this business at the right time.

Briefly Remate, so Remate is the number one Mexican broker. They broker interest rate swaps bond -- sorry, interest rate swaps, bonds FX. We've been dealing with them for many years. We've known them actually since September 11 and run by world class team led by Jacques Levy who is the CEO. The reason for this acquisition was strategic for us in Latin America.

We already have a business in Latin America with Liquidez which we manage to grow and build over 30% -- sorry, 130% since we've owned them in a short span of time but mainly by keeping them, that financial muscle and that platform to grow and build and especially new technology where we now bring them in today's they are brokering treasuries and many other products than we have in North America.

It's crucial to give them that opportunity. Many companies now are hamstrung with the market as it is today and how they can't compete in the new -- in the new world.

So just a quick conclusion, so we're well-positioned to the regulatory change. In fact, we're the at the forefront of it. Now, we positioned our SEF with their SEF. We have ELX. We have 1,500 brokers and we have a technology and we have financial muscle.

So we kind of continue the cost cut and positioned ourselves as best we can with -- in the headwind markets but all we're thinking we're going to upgrade, we're going to build and we're going to invest. We're going to grow energy and commodities business as I've said.

Technology, further investment is always going to be needed. It's always going to be -- always going to be thinking about putting ourselves for the front. So this is as we said about regulations not going away.

It's going to be with us for quite some years. It's going to keep changing. The landscape is going to keep changing and the competitors that we're up against, we think a lot of them are going to fall by the wayside. It is a new landscape.

And more importantly, across all of our products, our client base is going to grow and expand mainly because of what happened to the marketplace with this earthquake that just happened, with Dodd-Frank and the SEFs. But it's just rippling across the whole of our client base.

Okay, thank you. Barry, over to you. Thank you.

Jason McGruder - BGC Partners - Head of IR So before we go to you, Barry -- you can sit back down there. I'm just -- sorry...

(MULTIPLE SPEAKERS)

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Jason McGruder - BGC Partners - Head of IR We have some questions for Shaun. So Jason, if you want to go in the front, I'll stay in the back. Thanks. But we can't wait with Barry, we can't wait.

Niamh Alexander - KBW - Analyst Okay, Shaun, and can I go back to your opening comments about-- it sounds like you've got -- it's more than just kind of looking to the market to go all to all and be an agency broker. You're looking to provide some advisory or services too...

Shaun Lynn - BGC Partners - President Well, is that the fringe banking you're referring?

Niamh Alexander - KBW - Analyst What is fringe banking and why is the company and not Cantor going to do it because they are broker-dealer so...

Shaun Lynn - BGC Partners - President They have nothing to do with us, so they're an investor but, you know, we have our own mandate. We do what we want to do.

Niamh Alexander - KBW - Analyst But are you going to compete with your clients?

(MULTIPLE SPEAKERS)

Shaun Lynn - BGC Partners - President Is it Cantor you're talking about?

Niamh Alexander - KBW - Analyst Pardon? No, you compete with your broker-dealer clients-- so help -- expand what fringe banking mean, what is a fringe banking?

Shaun Lynn - BGC Partners - President So fringe banking is non-risk banking services which is given by the banks. So it can be advisory, it can be corporate access, it can be anything that we so wish to move to.

Niamh Alexander - KBW - Analyst Like underwriting?

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Shaun Lynn - BGC Partners - President Well, underwriting, you can -- you're talking about advisory more than underwriting. You know, you're not going to be taking financial risk. But yes, you're looking at bringing new issues, IPOs.

Niamh Alexander - KBW - Analyst So would you look -- would you look to make some acquisitions of some smaller brokers or broker-dealers?

Shaun Lynn - BGC Partners - President Yes. We wouldn't look at -- you've looked at small agency brokers, you look at large agency brokers. Anyone that's within that space is taking no proprietary risk. You look to acquire and to add other brands that -- we have a brand now called Mint within the company now. It's an agency broker. And we would look to expand and build that and they bringing you issues to the market such as structured products, for instance, which is a traditional banking business.

But the banks aren't providing that service, but some banks have fallen away and they can't make money at it because of their infrastructure, because they're not willing to commit to doing that any more. So we see that as an opportunity or one of the opportunities for us to grow into to.

Niamh Alexander - KBW - Analyst Okay. And then just to be clear, you talked about the $176 million of sales in trading. I mean that's -- in the fixed income group, that's predominantly where the dealers commit principal and it's all bid-ask spread-type revenues. You're not...

Shaun Lynn - BGC Partners - President I talked about liquidity though. So if you think about it, the major buy side and looking for liquidity.

Niamh Alexander - KBW - Analyst Yes.

Shaun Lynn - BGC Partners - President But they're not committing capital anymore. The major banks have pulled away from that. So we see that as an opportunity but they still need to get to the market as the customers still need to execute, they still need to liquidity.

Niamh Alexander - KBW - Analyst But you're not going to commit capital to...

Shaun Lynn - BGC Partners - President We're not going to commit capital.

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Niamh Alexander - KBW - Analyst But how are you going to play liquidity?

Shaun Lynn - BGC Partners - President The process -- we have the process.

Niamh Alexander - KBW - Analyst From whom?

Shaun Lynn - BGC Partners - President From everybody, from the banks, from the other dealers, from the other buy side community, from everybody. We have -- because we have 1,500 brokers, because we've got into not every household but the majority of households.

Niamh Alexander - KBW - Analyst Okay.

Shaun Lynn - BGC Partners - President We have been into everybody.

Niamh Alexander - KBW - Analyst Okay. (inaudible).

Jason McGruder - BGC Partners - Head of IR That was Niamh, and this is Jillian Miller from BMO.

Jillian Miller - BMO Capital Markets - Analyst Following up on that last question, you know, you said that you've got prices from the other buy sides that you're providing liquidity but are there actually buy side, you know, firms actually on your platform?

I mean I'm assuming we're talking primarily about some of the Dodd-Frank-type products. Are there actually buy side firms that are active on this SEF right now providing prices?

Shaun Lynn - BGC Partners - President If you're referring to just Dodd-Frank and you're talking about both are required, no...

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Jillian Miller - BMO Capital Markets - Analyst Okay, so you are talking more about like...

Shaun Lynn - BGC Partners - President I'm talking about the market, the ripple effect across credit, FX, across all of the products. Now...

Jillian Miller - BMO Capital Markets - Analyst Okay.

Shaun Lynn - BGC Partners - President ... we are live on sponsored access so we're working along those lines but again, back to traditional clients, but we provide sponsored access to the buy side.

Jillian Miller - BMO Capital Markets - Analyst Okay. And then there are kind of three things that you, guys, talked about as being acquisition opportunities, there is the whole fringe banking, energy and real estate. Is there any kind of priority among these three for you, guys, internally or is it really just what are, you know, opportunistic, what's the best opportunity at the time?

Shaun Lynn - BGC Partners - President I would say energy and commodities, they are the number one priority and general acquisitions that are going to be accretive to that company. Fringe banking is something we're going to build because the market is just breaking down because in -- you know, which is just I think what's happening now.

It's going to -- over the next two, three years, you should expect to see us move into the fringe banking. I would focus on energy and commodities. I would focus on us growing into our traditional market space as well looking for accretive acquisitions to add onto our platform that we have. So therefore, the more revenue coming in, more money to the bottom line for the back office and the technology we already have.

Jillian Miller - BMO Capital Markets - Analyst Okay, and then one more, you had mentioned like 70% of the brokers are signing new contracts as of April. Can you give us a sense for what the new contract looks like versus the old, what are the major changes?

Shaun Lynn - BGC Partners - President It's much, much bigger. The difference is that it's an education process for all of the brokers. You know, we liken it to, you know, some of the brokers you might think that it's a turkey for Christmas. It's not.

What they're realizing now is that this is the evolution of the market. And they're recognizing those I think - we've been one of the most successful of turning that market electronic. It's a continual push by us.

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As we've proven, we've changed a lot of the brokers. We moved them on. We brought in (inaudible) accept and understand to where the market is moving. And so we've done everything we can and will continue to do that to upgrade and improve revenue per head and the understanding of how the market is moving.

Jason McGruder - BGC Partners - Head of IR And just to reiterate that 70% figure applied to just the financial services segment.

Any other questions before going to Barry? All right. And Mr. Barry Gosin, CEO of Newmark Grubb Knight Frank. Oh, sorry, we have one last question. Sorry.

Gerard Heymann - JP Morgan Securities - Analyst ^ Thanks.

Jason McGruder - BGC Partners - Head of IR State your name, please.

Gerard Heymann - JP Morgan Securities - Analyst Sorry. Gerard Heymann, JP Morgan Securities.

(MULTIPLE SPEAKERS)

Jason McGruder - BGC Partners - Head of IR How are you doing?

Gerard Heymann - JP Morgan Securities - Analyst Just a quick one on the acquisition of HEAT that you've just recently completed.

Shaun Lynn - BGC Partners - President Yes.

Gerard Heymann - JP Morgan Securities - Analyst The synergies of that will bring in to your energy trading desk. Can you give a little bit more elaboration to that in the face that they're already happening in regard to revenues business and future business?

Shaun Lynn - BGC Partners - President Are you referring to the type of synergies in regards to real estate or are you referring just in general because...

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Gerard Heymann - JP Morgan Securities - Analyst Just in general.

Shaun Lynn - BGC Partners - President ... Well HEAT are just in West Coast power -- you know, not East Coast power, for instance. And so you should expect us to grow and build the power markets across North America and South America.

So from that perspective, it's a huge opportunity. But then on top of that, we spoke about, you know, something that another opportunity which is where we will be selling electricity effectively to commercial leaders with help hopefully by Barry and his team to the major real estate holding in North America.

Gerard Heymann - JP Morgan Securities - Analyst Thank you.

Jason McGruder - BGC Partners - Head of IR Now Barry. presentation

Barry Gosin - BGC Partners - CEO NGKF (inaudible). Good morning. So since we're relatively new to the family, I guess I'll talk a little bit about who we are, a little bit about the landscape, our performance and then our plans.

So Newmark traditionally was a New York-based real estate company. There were many other companies around and there are approximately 32,000 of those types of businesses. We dominated the New York market and we were -- and we are now in the top two or three companies in the space.

And having been a dominant player in this -- the largest market in the U.S. is a real advantage to leverage that to exportable business throughout the country and as such we began on our own to expand in all the markets around the country to bring our clients and to benefit from that opportunity that we created here in this market.

Obviously, there was a limited ability to do that without a strong capital partner to execute on our plan, so we sold to BGC. And with the combination of BGC and Newmark had given us all of the tools, all of the opportunity to really take what we're created and be the next large company in our space.

So we have an incredibly big runway and an incredible opportunity with 32,000 companies doing what we do and needing an opportunity to find a home and additional support to grow their local business.

We now are a global company. We're one of the largest in the space, you know, relatively short amount of time. What's unique about us, we've -- we have established what we believe to be an incredibly disruptive holistic strategic approach towards real estate that seems to be resonating in the corporate community as Michael will discuss in his presentation.

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We provide something that the rest of our competitors don't, a combination of technology and strategy and consulting that is fully integrated, holistic approach towards global corporate real estate.

And we think that's -- that's going to be our marker, that's going to be our differentiator and building out the platform, putting all the dots in the map, dealing with the opportunities to be hired in a state where procurement people make those decisions and look at where you're located and what parts of the world are necessary to be hired.

So we are in the process of building out that platform and I -- and I'm incredibly excited about the opportunities and all of the interested parties out there who are being stressed by being a small local provider and looking for the proper home to find themselves and given the opportunity to grow.

So the thing that makes it a really good marriage is the fact that the brokerage business which BGC is, is built around innovation, providing advice and counsel on how to buy bonds and how to sell bonds.

So innovation, value creation and technology are really part of it. Anything in the real estate business are so similar. We have brokers. We pay them a percentage of their revenue and we have to provide them with the infrastructure, the resources, the innovation, the support, the creativity in order to win the business.

At the moment, we acquire companies and once the platform and the distribution capability is built then the opportunity to win business which is purely accretive and non-share dilutive is the real -- real runway that we will create ultimately when we build that foundation or the company.

We have -- we now have a very strong footprint across the United States through our purchase of Grubb & Ellis and several other regional players and for our Smith Mack and Frederick Ross. We are able to expand the companies that we own and we also provide, you know, very small markets, we have an affiliated network which gives us the localized knowledge and we support them with all of the creativity and the execution from our -- from our headquarters.

There are two elements to the business basically. There are two ways most people historically looked at the real estate business or the geographic business. And it's easy to see by, you know, the size of the market, so New York is number one and therefore we are -- I mean we're already well established in the number one market.

Washington is the number two market. I would suspect in an incredibly short amount of time we will be right there in the top three in the business. We are trapping incredible talent. The combination of BGC and the resources and the balance sheet and the ability to execute on a plan is exciting because -- because many of the people in this industry and its talent-driven like every other brokerage business are excited about the opportunity to coming to a firm like ours who is new and different and disruptive and creative and not broken.

So we plan to focus on a geographic strategy and the geographic strategy is the -- are the gateway cities which have the largest bucket of opportunity because they have the largest footprint.

And in those markets, if we could dominate, we'll have the highest margin because many of the costs are fixed, a lot doesn't have to be added. When you add 50 brokers to a market, there's very little that you have to add because research is a fixed cost to same research, financial and analytical capability is pretty much fixed. And the opportunity is great once you establish momentum and people want to work in -- at your company.

The other pillar of the business is -- oops, that's the wrong way. There we go. So the two sides of the business are -- one is the geographic and more people think that real estate people just show buildings and know where they're located but, you know, that's a lot -- we're a lot more than that and certainly on our strategy implementation approach to the business. Certainly, we believe in creating value.

The other pillar of the business is the real estate owners and the occupiers. And in all those businesses, we can provide a host of services.

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And on the owner side and part of the benefit of being part of a global capital markets company, the ability to understand the capital markets on a global basis, how financing works and how we can support them in valuations, underwriting and the kinds of things that you need as well as the simple plumbing which is the lease administration, property management and the pure transactional brokerage for them.

On the occupier side which is what I briefly talked about which is something that we're incredibly disruptive in is the concept of providing account management, tenant rep, strategy, project management, consulting and advisory so that the decisions they make when they determine where they should be and who should be where and what employee should go to what locations, is very strategic. It gives them flexibility and keeps their costs as low as possible.

So that's -- that's a little bit -- so did I go the wrong way again. Okay, so I -- I want to go back. So the other side of it is so the wind in the sails. Right now, the -- there seems to be -- I guess I'm not a technology person. Good thing that we married a technology company.

Okay. The real estate market has been fueled by incredible liquidity and the things that factor in what makes real estate successful. It is -- are the things like unemployment, rate going down, GDP growth and low interest rates.

So the capital market side of it, right now, we have incredible liquidity, we have low interest rates and in that kind of environment, the capital market is as robust as it possibly can. So from the multifamily side, on the commercial side, people are paying record prices for properties and it continues to be -- continues to be great.

In the U.S. office market, vacancy -- vacancy rates go down. When vacancy rates go down, prices go up. It's not that complicated. Prices go up, revenue goes up, we got paid because on revenue so the opportunity for us in that -- in that area is really good.

With the acquisition of Cornish & Carey, the Silicon Valley is an incredible distributor of business in the amount of companies that get proliferated out of that area is enormous and we look forward to the opportunity and the closing of that deal.

There's enormous amount of turnover in the mortgage-- in the mortgage business. When that turns over, there's opportunity for refinancing, opportunity for sale, recapitalization and equity raises. So that's all -- that's all works for us.

So the -- generally, the market going forward on the capital side looks really good. The leasing side is always fairly steady because companies even in the good market and the bad market need space, they move people, they downsize, they look to save money, and in all that, it creates activity for us and as we become more global and we win market share, we'll continue -- we'll continue to grow.

We've had a pretty good record of growth. Ourselves in New York, we grew in New York from -- back in the pack, we were 15th out of 12 companies and we grew to be number two. And we did it organically with our acquisitions by winning and developing our business plan and our business plan was creating a disruptive model that would get us that kind of market share and recognition

And now, we're filling up the pipeline by acquiring companies and brokers all over the country. And the buzz about NGKF around the industry is incredible and that's been a big change. We are 28 months I believe into this and the conversation in all of the competing brokerage companies has changed significantly in the 28 months. People are talking about us as the place to go.

There -- the fundamentals of the business are no different than BGC. It's really about -- it's about market share. It's about revenue per capita and cost per desk. So we have a -- we have an approach towards hiring the best and the brightest and the most productive.

And with the tools that we've created and our strategy, we're taking -- we're taking companies and we're taking brokers and making them far more productive as has been exhibited by our rising per production per capita and our increase in distributable earnings.

Basically, you know, we have a certain amount of headcount and we have a certain volume. And by looking at that, it's incredible, we've had a -- we've had production to acquisition. We've hired better brokers, that's our focus, but we've also been able to increase our same-store sales, so to

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©2014 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 29, 2014 / 2:00PM, BGCP - BGC Partners, Inc. to Host Analysts and Investors Presentation speak, at about 25% basis which is -- which is also very good. So we see the results of providing the tools for brokers to be better at what they do. Obviously, we're showing very well in the sector and we seem to be growing at a faster pace.

Our clients are the who's who of every kind and then if you look at our client list in New York, it's -- and we do work for most of the banks, most of the law firms, many of the health institutions.

It's a very institutional quality clientele and we are now bringing those clients across the country. We're hiring the brokers in the local market set, win that business as well. And we are winning account after account and it's incredibly exciting and we see it -- we see it -- that it's going to continue.

One of the things that I -- that are important to us and the way to really build the platform out was -- is you need to adopt some amount and part of that is really as a result of large corporations, buying our services on a procurement basis with the matrix of how they pick.

And one of those is, well, how do you service clients in South America? So we were able to secure 50 professionals in South America. And we covered Chile, Peru, Brazil, Mexico, Argentina in one fell swoop. So we now check that box and we no longer have to -- had a question mark to how we're going to service those clients.

Cornish & Carey is the most exciting thing we've done. They are the leader in the Bay Area. They were the first broker for Google, eBay, Amazon, LinkedIn, Facebook. And what happened for them is they would the client up to about 100,000, 150,000 square feet and move them to a national because they couldn't service the client on a global basis.

But on Sand Hill Road and in, you know, whether it's Santa Clara or Palo Alto or any of those locations, they own the market. And now that they're part of us, they will own them forever as it has been exhibited by the fact we do in Facebook all over the globe or doing other technology companies now as a result of the relationship. We're keeping those companies and then we're moving them from market to market.

The opportunity in the industry is incredible because of the nature of how fragmented it is. It's not a market that has three people doing 80% of the business. The top five firms, do about 32% of the office leasing, 48% of the sales which is a little bit more consolidated and only 20% of the FM and the PM.

So many companies really began to outsource only 15, 20 years ago and that seems to be growing. The companies want to remain in their core competency and they want to hire people to do stuff that they're not really good at.

So that market itself, the market itself will increase and our market share will increase as a result of that. So the two things we have going for us is the opportunity to acquire, bring onboard talent and the opportunity for an expanding market and an expanding market share.

This is -- this is a period of time where almost everything, you know, all the cylinders are working, companies seem to be growing, I mean the market is doing really well on the office side, the sales market is growing, the multifamily market is growing. People want to borrow money. It's -- it is a pretty good time for our business.

And to sort of sum up where we really go from here, the interesting thing as I talked to people around the country, the one thing that we love about the company is the fact that we've created starting in New York at the base, an incredibly cooperative and collaborative environment.

Our people work together. They've been together a long time and most of the competitors are working in the silo to a lot of individual brokers as independent contractors who don't share information, don't work together to acquire clients and our company works differently and they're seeing that.

So in a market like Washington, we are tracking people. And because we're able to execute on our client and finish of job, people in different companies who have always thought about working with their good friends who are the best in the industry are now -- we're helping them facilitate -- building a business in the market where they could bring all of their friends and all the good brokers to come and work together which they've

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©2014 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 29, 2014 / 2:00PM, BGCP - BGC Partners, Inc. to Host Analysts and Investors Presentation always thought about for many, many years. And so that's our strategy and our approach in each of these markets and it seems to be working really well.

We give our brokers a significant amount of rope. And if you hire really good brokers, it doesn't require a significant amount of management, interesting enough. The rules of engagement are set and very clear. And they go out every day and they hunt and bring in business.

So the combination of BGC and Cantor and all of the relationships and the leverage is an incredible opportunity that I don't believe any of our competitors have and so we look forward to a very good year in '14.

I'm going to bring Michael Ippolito up.

Michael Ippolito - BGC Partners - Chairman NGKF Global Corporate Services Hi, everyone. Thank you. Thank you, Barry.

We want to in our industry about global corporate services but there's also a lot of differences or lack of understanding of what it is for different companies. So I said I'll be talking about what it actually means to our company and why it's important to the overall industry.

So within global corporate services, for us, it is the group within our overall organization that is responsible for helping companies development strategies on how to best align their people in their real estate with their overall business objectives and to do it at the lowest cost possible.

Then we give our strategies and we implement them and further, we manage those facilities on an ongoing basis. So it's very close relationship that we've developed with our clients but to do this, we need to have the skill set and resources that understand business operations, that understand financial engineering to understand how to occupy where the owner lease and how should you lease the real estate and you have to understand the global market because our clients are everywhere.

In addition to that, leading technology platforms that enables us to provide our clients to have transparency with their total occupancy costs. They need to be able to take that data and develop analytics which we can do scenario planning and do portfolio strategy. That's what we're all about in the global corporate services.

The technology platform is key and it's really fortunate for us with BGC being leaders in technology and the financial services world. We work together and do the same thing in the real estate world. So we have an unbelievable and robust technology platform that we provide for our clients and also help us do a better -- our job is better and do them quicker.

So if you look at global corporate services, it's the operations consulting. It's the account management to oversee the whole thing. It's the lease administration having to manage the data that comes in. The transaction management to actually execute on all those strategies as well as the project management and program management to implement and the facility management to maintain all underpinned by our technology platform that aligns everything.

So why we appeal to corporations, so we went out and look in corporations and we said, what is important to them and why -- do they outsource. If you look at the key reasons or main reasons, they want to reduce their costs. Every company wants to reduce their costs today. Every company is looking to leverage -- to extend, leverage their resources.

But all of these reasons, when you look at them, they are focused mostly on execution of services. So companies outsource to leverage and reduce costs by having to execute and help them execute.

What's interesting on here is one of the reasons that we want to outsource is to redirect their internal resources to a more strategic endeavors, Okay? So if we're thinking of outsource of how to execute, how to implement.

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So when you look at why they don't outsource and why they insource they're more strategic in nature, all right? They don't see that the activities for outsourcing are strategic enough, right? They need to keep those internal. They don't see the business case.

So the more the strategic opportunities on how they run their business more efficiently, to keep those in-house and they mostly outsource the execution services. And it's further supported when you look at outsourcing and insourcing by actual service lines

You will see the portfolio strategy, the real estate strategic planning, they all keep us primarily in-house and outsource the execution services. So that's an opportunity. Okay, that was the basis for the opportunity for our development of global corporate services, so how do we align versus them, how do we see the opportunity to get the companies that are looking to in-source as well as outsource to work with us. So we had to align our services with what our clients and corporations are actually asking for.

So mostly of the organizations focus on the bottom half of this circle, transaction, project management, facilities management. Our view was for us to really add value to our client, we need to help them start to figure out how do we operate efficiently within the box, right?

Every company has a box. They have -- it's an office, it's an industrial facility, it's a retail store, right, it's a box. And our clients have multiple options. Most corporations are regional or global today, so we need to have them understand where do you locate those boxes, how many should you have, how many distribution facilities, how many office facility, how to actually make that whole strategic plan work and how to align their real estate with the business.

So we need to do this for our clients and our clients are global so unlike the rest of the businesses within in NGKF, we are truly global. So we're delivering strategy and we're executing on transactions and implementations literally around the globe today for our clients.

So when you look at what we offer, what the actual solution is, it's the strategy, Okay? Our consultants provide a strategy. It's our technology platform that provides the transparency in the metrics and it's our execution system that lets us deliver consistently across the globe.

And what this does is it creates a real tight bond with the clients. So now, the head of real estate, he has a seat at the table. He has a seat at the table because he's not just talking about the cost of the building that they're in. He's talking about how that building affects their employees, where that building should be and how it affects the overall business decisions.

That's part of our goal, is to create that realignment with our clients and it's working. So these are some of our clients. They are the variety of office clients because it's a very diverse client base.

They're office, they're industrial, they're retail, they are clients that are representing locally and regionally and globally and the clients that were doing one service line on a multi-service lines for them.

So we're trying to build the bond with the client that where we're filling a need for them, right? We're leveraging their strength whether strategically or operationally by partnering with us on an ongoing basis.

The other thing that is important to note is that we don't just preach and give advice, we actually take our own advice. So as you see and know we've been growing rapidly, we're requiring companies, we're requiring talent.

So we want our producers or brokers to be focused on creating revenue. We want to make sure our operations are aligned. So we acquire same strategies internally for our own growth. Our integration as a company is we have -- we actually take onboard and the onboarding of the individuals as those companies have been seamless.

So the idea is we've looked at the revenue producers, focus on what they do best, make money, refocus on the opportunities behind the scenes, the back office, the operations to make sure that we're running at the least cost possible and most efficiently as possible which you obviously keep increasing their margins. So it's a really integrated platform that's been working well throughout the organization.

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When we look at it with regard to our actual clients, how it would actually work when we have the opportunity to do everything for our clients, confidential clients and global, 108 countries, the transition is seven months for full outsource, for all of our service lines and help them develop strategies which we then implemented with a dedicated staff because we're doing everything for them in this case it's 200 people, 200 people to do the implementation and the result has been transaction in a 140 markets.

Project management engagement, all of the full execution service lines based on a strategy we've developed together and a result of $100 million savings, year one. So it's very exciting when you see all the pieces work together and we think there's a lot of companies out there like this.

So we think this market is an approximately $60 billion market. It is a huge market. We think that both of the markets are companies that haven't outsourced yet for the reason I described earlier.

So those companies are the key target market for us and again, a diverse client base. So our methodology works where there's office or industry or retail. And as well, because of this integrated platform, we think we're going to increase our market share of the already outsourced market that exists today, because it is something unique and different and truly focused and value for the client.

And again, we have a very strong trajectory since we were acquired 28 months ago. We have 29 new accounts, roughly 300 million square feet of space that they control and that's growing for us.

So in summation, when you look at what we're doing, we're focusing on getting value, driving value to our clients both with their people, where they have people, where is the best talent base at the lowest cost, how that aligns with the real estate that they're actually occupying, how to occupy that real estate most efficiently and how to do this at least cost.

When we sit down with our clients, we're talking about our view of the world and our view of the world is real estate is an inverse profit center. Okay? That's what we try to change the thinking.

Real estate is an inverse profit center, every dollar we save for the bottom line or we're saving in real estate goes right to the bottom line. If there is a cost associated with real estate improvements in how they operate then technically that's cost of sales, right?

We look at it at a very quick ROI and any investments the clients make to improve their operations, it was very strong trajectory. Since we were acquired 28 months ago, we had 29 new accounts, roughly 300 million square feet of space as data control, and that's growing for us.

So in summation, when you look at what we're doing, we're focusing on adding value, driving value to our clients both with their people, where they have people, where did the best talent base at the lowest cost, how that aligns with the real estate that they're actually occupying and occupy that real estate most efficiently and how to do that at the least cost.

When we sit down with our clients, we're talking about our view of the world, and our view of the world is real estate is an inverse profit center. Okay? That's why we try to change this thinking. This is inverse profit center. Every dollar we save for the bottom line or saving in real estate goes right to the bottom line. If there is a cost associated with these improvements in how they operate, then that reduces cost of sales. Right?

We look at it as a very quick ROI on any investments the clients make to improve their operations. And it's been resonating well with the clients because in real estate, the corporate real estate functions they're always sort of a cost center. Now the thinking is-- hey, we're a inverse profit center, so again giving us a seat at the table. And the best part of the whole thing is profitable business for us.

So we're actually changing the way we are making money with our clients because it's not one-off transaction base. It's actually the recurring income stream that we talked about earlier, looking at getting fees for different types of services and consulting services that are recurring as well as a feeder for the entire system whether it be for capital markets -- for clients who have a capital markets need, or if they have an appraisal need, or if they have an energy need. So it's actually a strong feeder of business for our entire family and their long-term contracts. They're all three to five-year contracts.

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All the real estate business company does in that timeframe, we do it for them and on their behalf. And it gives us real stickiness to them. So the multiple touch points that we have with the client not just in the corporate real estate section, it's with the C-Suite, it's with the business units, so we have multiple touch points. It's great for retention. It's great for standing the relationship with those clients.

Jason McGruder - BGC Partners - Head of IR Okay. So before we break for lunch, are there questions for Barry or Michael? Yes, there is.

Can you please say your name and firm? Thanks.

Mitch Germain - JMP - Analyst Mitch Germain, JMP. Are you seeing a broader acceptance of outsourcing outside the U.S?

Michael Ippolito - BGC Partners - Chairman NGKF Global Corporate Services Actually, it's moving steady. So the U.S. actually was being more advanced in terms of outsourcing, but there's been a lot of inquiries, a lot of questions on what the value is. So we do a lot of more informal education sessions for them, but it is starting and being definitely a growing trend.

Stuart Shikiar - Shikiar Asset Management - Analyst Shikiar, Asset Management. Congratulations, it's really a terrific growth story.

I have a question for Barry, I guess. Are there any parts of Newmark that are not parts of BGC? And the reason I ask I looked at the appendix at your bio and it talks about partnerships in various buildings. Corrected that some of that is a full carve-out and away from BGC.

Barry Gosin - BGC Partners - CEO NGKF Well, we historically acquired buildings for our own accounts over many years. They are now a client of the firm, so we pay these to Newmark. And my original partner that comes from the chairman of the firm, Jeff Gural, runs that with an agreement with Newmark.

Stuart Shikiar - Shikiar Asset Management - Analyst I see. And a follow-up question. When the company was purchased by BGC, was that consideration all cash or is it cash in stock?

Barry Gosin - BGC Partners - CEO NGKF I know it was a combination.

Jason McGruder - BGC Partners - Head of IR Any other question? It's Niamh again.? No, we're transcribing it. That's all.

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Niamh Alexander - KBW - Analyst Niamh again. If you could just help me understand maybe the distribution of contracts like, at the high end, is the tens of millions of dollars is kind of a fee-based contract and at the low end a few hundred thousand? How was it distributed? You brought on a lot of new clients or the bigger clients. I'm just trying and get a sense? You're talking about recurring, but I don't know if it's lumpy or what.

Michael Ippolito - BGC Partners - Chairman NGKF Global Corporate Services Again, parts of it are lumpy, some of it is transaction-based and some of it is just fee-based. So I'm not sure the question relevance.

Niamh Alexander - KBW - Analyst What I'm trying is a sense of is how the business operates and when you sign a consulting contract and you're kind of maybe sometimes replacing some in-house real estate people with your own. Is it like a multimillion dollar contract?

Michael Ippolito - BGC Partners - Chairman NGKF Global Corporate Services Some are multimillion dollar and some are low millions

Niamh Alexander - KBW - Analyst And then your team refer business to the kind of sales or lease businesses above that is...

Michael Ippolito - BGC Partners - Chairman NGKF Global Corporate Services So what's great about it is as we developed the strategy with the client and there is, for example, some execution needs to be done in Houston, we will use our local office in Houston to deliver that transaction or the project manager. So that's what we say we're a feeder we're actually developing the strategy and that execution will require our other resources around the firm.

Niamh Alexander - KBW - Analyst And earlier you said develop a strategy like the company decides they want to be in a certain market, then you kind of say these are the areas within that market you want to be. I'm not sure whether that...

Michael Ippolito - BGC Partners - Chairman NGKF Global Corporate Services So in some cases, it's in a market. In some cases it's -- can you tell us where there is the best talent pool for this type of job -- engineering job, for example.

What are the wages of this type of job through all of the U.S. or throughout the entire globe? Are there different types of operating centers for call centers, for example, sort of the ideal place to put a call center given the type of skill set that's required in this call center. Is it an inbound, outbound call center? What is the size of the call center? So we're actually not only looking within a market for them. Sometimes we're telling clients or advising clients on what are the ideal markets for the objective that they're looking to solve for.

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Niamh Alexander - KBW - Analyst Is there a tax involved like tax consulting involved there? So that's a big part of the decision oftentimes.

Michael Ippolito - BGC Partners - Chairman NGKF Global Corporate Services It is, but yes, the partnership. So as I said, we partner with our clients here. They don't hand everything over to us as a partner. So we'll work with the internal tax folks, of course. We'll actually do these very large incentives practice, so we'll work with the company to and negotiate incentives for companies to go to one market versus another.

Niamh Alexander - KBW - Analyst Okay. Thank you.

Jason McGruder - BGC Partners - Head of IR Jillian Miller?

Jillian Miller - BMO Capital Markets - Analyst I think -- I hope I wrote it down, right? But I think you guys said that you had like same-store sales growth in about 25% last year for United States. And I was just wondering when I look at all the factors that would go into that, how much is the fact that your property volumes have been improving as you said in some of these kind of cyclical factors in the market versus how much of that was I don't know improving analytics of a technology platform, some kind of efficiency that being part of BGC provided.

Barry Gosin - BGC Partners - CEO NGKF In some of the markets the markets have gone up. But the bulk of the country the markets are relatively flat, so a lot of it is more productive brokers using global corporate services, using some of the other services that we provide like being on a data platform. It certainly helps -- the collaboration between offices, winning more multimarket business, going into other markets and winning the biggest finance.

Jillian Miller - BMO Capital Markets - Analyst Okay. And then I just want to understand what your, I guess, what differentiates you guys. I know obviously from the small guys, you are global and you have scale and you have the cash behind you now to hire the best people. But apart from that, what if your strategy is different from the other two largest real estate brokers out there?

Barry Gosin - BGC Partners - CEO NGKF Well, I will mention there are companies that win out of ubiquity. You have a big enough footprint, you know enough people stuff happens. And then there are other companies who are strong on the plumbing project management, corporate services -- one of those two.

And we have a different model in that Our objective is to empower the broker not disintermediate the broker. So we don't believe that at the end game you can just make the broker disappear because relationships are real critical and important. So what we're trying to find is a balance.

So Michael's group doesn't really have a sales force. Our sales force are all the brokers. And as opposed to being at one of those two larger platforms whether the stated objective is to make every client and institutional house account. That's not our stated goal.

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So we'll welcome the broker. We'll welcome him with his relationship. We'll provide them with the technology tools to be better than he would be at a smaller company or at one of those larger companies. We'll be part of the process but maintain the relationship. So the combination of infrastructure resources, value creation in concert with the relationship broker makes them better, makes us better.

Our technology platform is way advanced of we believe is way in advance of our two competitors.

Sometimes when you come in every day, you're the number one and you can't get any bigger, the market comes to a point where 1 and 1 equals 1.5 or more is more. We're now at that point, so we have an opportunity and a big runway to grow, and that's an opportunity for brokers to come.

Our technology is very focused on strategy and creativity and innovation in our consulting group, which is significant, does part fee-for-service, part transactional as well. They are more likely industrial engineers with MBAs of Finance or workplace strategist or planners or architects than they are real estate people traditionally. So we brought something unique to the game.

And the thing that we saw in the business that clients were not getting strategy in concert with their making tactical decisions in real estate. And even CEOs and people will glaze over and not really understand exactly what we do. But when you sit down with the CFO and you talk about workflow, you talk about shared services, you talk about total spend, you talk about I.T. ops not being in one of these urban areas like New York and you look at demographics and opportunities in markets, political risks, incentive opportunities, all those kinds of things.

Can you talk about it in a way that is independent and agnostic and align that in a way that helps the company? And then you provide the distribution capability on the execution. We believe you'll be far more sticky to the client because you're now a partner with them in making those decisions. And then you can execute it so the brokerage in the regionalized businesses will be happy because they will have a pipeline of opportunity working with corporate services to deliver transactional business.

We also have a lot of very creative areas, which being an incredibly entrepreneurial of our institutional company. Yes, so we have a solar business, energy business. What exactly does it mean? We have a guy that basically sells land for solar farms and sells of these net credit to corporate clients so we can have a corporate client. We may find him his office space, but we could then deal in its carbon credits. We could deal in its solar credits. And we find other ways to create value because we are affiliated. We have a sister company. We have financial institution that gives us a much more in-depth knowledge into the overall holistic financial world that they can't get at the other competitors that we have.

And so fundamentally, maybe when you're not the biggest and you get kind of fat and happy, and you have to be far more innovative and creative, we have a DNA that is around innovation and value creation and around strategy and implementation. And our objective is to be a realty brokerage company built on a consulting and technology platform so that we could provide a much more integrated solution to clients that's a better brand, more sophisticated, more value creation, and appreciate for the work. And hopefully, when they appreciate the work that the margins won't be as compressed because you have a commodity product.

Jillian Miller - BMO Capital Markets - Analyst Thanks. That's helpful.

Brad Burke - Goldman Sachs - Analyst Thank you, Brad Burke with Goldman Sachs.

What are things you're looking at over the next couple of years to propel growth. How much of that do you think is going to come from organic opportunities you already have and how much of that do you think is going to come from acquisitions, either brokers or people?

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Shaun Lynn - BGC Partners - President With regards to opportunities that are going to come along, if you can't see that now which company you might or might not buy.

From a financials point of view and Barry had speak about from a real estate perspective, I think that the acquisitions are going to be much quicker and much faster to market. We think it's a huge pressure on a lot of our competitors especially the small competitors, as I said, that are in the land where regulation costs, technology are all burning costs for everybody at the moment. And some companies just really can't compete.

So in a smaller company, yes, everybody speaks about the potential consolidation of the larger IDBs a question will come up I bet later on.

I think that it's a difficult landscape. I think that these pressures are on a lot of the companies. But I think the major IDBs to be looking outwards towards smaller companies rather than looking inwards at each other.

I think it's quite difficult because of the overlap of businesses that some of us have. If we're looking out, yes, we're looking at an opportunity, but we would rather invest the money inside energy & commodities or real estate or another asset class rather than just stay within our sphere financials.

Barry, want to speak on real estate?

Barry Gosin - BGC Partners - CEO NGKF I think it's a combination. I think in the beginning acquisitions, but ultimately, once the foundation is built, the market share will increase because we'll become more of a safe choice, more of a spoken -- when they say CBRE or JLL, they'll say Newmark. And that's what's happening now already even with our footprint significantly less.

And when those large companies and large institutions even on the property side submit out a proposal for an RFP, when you become -- once you become the safe choice then it's not about acquiring the business, it's really about performing and credibility, and executing on an RFP response. So you need all the food groups. So you need someone that can win a beauty contest at every major city market. You need someone that does retail in every market. You need someone who does a variety of different services.

So once you cover all the food groups and you hit all the bases and you established yourselves as having a sufficient enough critical mass and distribution capability to be a safe choice then it's all about winning market share and improving revenue per capita. And I think that it's a combination of both. I think ultimately we still are in the process of building out the platform. And when we get there, I think the balance will change to create business.

And we see it already by the wins that Michael has gotten in GCS. When you win an account, a 60 million square foot account as we just recently won, and we estimate it's $10 million or $15 million a year business, that $10 million or $15 million a year business I'm going to have to dilute the shares and I have to write a check. And that's purely accretive, but I could have very easily gone through a region with a $10 million company and pay the number as a multiple of EBIT for our multiple revenue, and that would have been shares, and stock, and cash or whatever.

So that's really the opportunity and the opportunity to be -- when there's two people controlling a market as large as this where it's a growing market is almost unnatural. And where the consultants and advisors and companies are looking for an alternative for the next company to do it differently, do it better.

And even, in fact, when you've been around a long time you've done enough screw-ups, there are companies when there's only two, there's enough follow up business on the opportunities that they've created by their own ineffectiveness at some point is everybody felt sometime. It could be significant enough to double us in business or triple us in the business.

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Brad Burke - Goldman Sachs - Analyst All right. That is helpful. And then on the acquisition front and the business for Barry just the level of competition that you're seeing right now, and if you can characterize that and maybe compare to what you were seeing 12 months ago.

Barry Gosin - BGC Partners - CEO NGKF You know, as I tell people, we're a people business and it's usually run by a guy who's run it for 30 years. Just like me, I ran my business from 1978. We speak the same language. It's a marriage. It's not like selling widgets. So you have to have a platform. The company has to have a culture. Collaboration is important. And you have to have the money to execute on the plan which is big factor.

So the competition in the market, when I break it down who's out there besides CBRE and JLL, it doesn't work. I mean, whether it's lack of money, too much debt, poor leadership and a misunderstanding of what the broking business really is, where are they strong in the important markets. I mean, we are dominant in the Bay Area, which is the largest distributor of business in my view in the country. New York is either one or two either way.

So when you have the two barbells of the business, that's a really good start. We will have the third in Washington very quickly, so when you cover those geographic areas where the largest amount of headquarters are located. And then we will do Houston, Dallas, Chicago, Boston, L.A., so we'll cover the locations where visibility into the corporate clients are and where the money is who are the institutions that buy property.

Once we cover that and we build out the platform from GCS, I don't believe they will have a competitor. I think that the other number 3, 4, 5, whoever is out there will have a hard time competing.

Jason McGruder - BGC Partners - Head of IR Okay. So we're going to break, 15, 20 minutes lunch. It's right outside the door where the coffee / danish were. We're going to come back in 20 minutes, and Phil Norton, head of eCommerce, and Jeff Hogan, Business Development, who is our expert on SEFs and regulation are going to give a chat.

And those in the webcast, we're going to pause for 20 minutes. presentation

Okay. So whoever is in the room gets to hear Phil Norton and Jeff Hogan. Phil Norton and Jeff Hogan are ready-ish to go up.

So in 30 seconds we're going to have Phil Norton.

Okay. Please welcome Phil Norton, head of eCommerce for BGC, and Jeff Hogan, head of Business Development. And they're here to talk about eCommerce and regulation.

Philip Norton - BGC Partners - Executive Managing Director, eCommerce Yes, I'm Philip Norton. I'm the colleague of Sean Windeatt, I'm a veteran. We'll discuss that further later. And I'm the global head of eCommerce where I'm joined by Jeff Hogan who is head of Business Development within the eCommerce team, and we're here to talk to you about technology at BGC. And Jeff will touch more on regulation, how it affects our technology and how it affects the business as a whole at BGC.

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So this is a diagram, which is representing the many businesses that BGC transacts in financial products. And I really want to start off by saying that BGC operates and generates electronic revenues in many, many businesses that are not affected by SEF. The reason I say that is BGC is far more from being just a SEF.

Now being a SEF is, in fact, not a bad thing, because some organizations are just that, just SEFs, but I do believe that ability and your business plan going forward.

We're about far more than made available to trade, and we cover many, many different asset classes and provide growth in services in those asset classes. Some of them have been traded by BGC for many years and on new products that are being brought into the company if we've made acquisitions.

The majority of these businesses have been successfully brokered in the OTC space. There's a reason for that, and they are the consortium interbank liquidity in secondary markets has often been very, very difficult. So that mix of voice and electronic is key. And we as a firm believe that will continue and still look to buying those businesses and look to provide the technology to build out their franchise.

We've been doing that since the late 80's when we used to do full screens for our government on markets back in Europe and, of course, from the early days of treasuries. And it has worked very well so we see no reason to change.

A lot of our clients use technology and use it in different ways and they've all achieved different amounts of traction. But what we do expect is for all of them to increase their electronic revenues over the coming years. I'm not sure that's what the SEF is made to represent, but we view them the same as those out of which we had to grow some fairly large oak trees.

So some of you may have seen this before. This is a slide that shows that sort of journey where BGC go from voice to hybrid, to fully electronic. And this is something that BGC have been doing since 2004 when we spun the company off from Cantor Fitzgerald.

We get to buy voice markets. We get build technology. And we look to the brokers and the technology to generate revenues in voice, hybrid and from the electronic marketplaces. And we still do believe in that.

They do not all use technology in the same way, and I'll show examples later on of how different businesses, what different functionalities to generate electronic revenue.

If you look to the left of the graph, when you look at voice, which is really stage 1 and this is the point at which we bring in businesses that are somewhat illiquid, somewhat structured, and we give the screens that they can use to disseminate their prices to their customer bases. This is a fairly basic model that is a very effective one.

But putting screens onto the desktops of their customers, we are able to get our brokers to reach more clients more quickly. And I think the screen is very much being a form of identification of their voice. It gets the noise about the business that we are doing with marketplace far more quickly.

In addition, these brokers also are very, very aligned on our quantitative analytics and prices. And this is really where resource intelligence for our brokers to then provide and generate trading ideas and indicative pricing for our customers.

The point of doing all this is that we try to get our customers to trade more and obviously trade more with ourselves. But really we're helping our customers to do what they want to do. As these business screens mature, then what you tend to see is more natural liquidity sitting on screen, and this is the phase that we tend to refer to as hybrid.

As more prices find their way onto screens, you will start to hear requests from customers if they wish to access the liquidity directly themselves. And we allow them to do that through our previously trade agreements or we allow them to do it through the automatic pricing interface, which basically connects their spreadsheets to our trading engines.

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And then the final phase, of course, this become more and more entrenched or as electronic trading comes more and more entrenched is fully electronic. And this is the stage at which our customers would price it and input into our technology. Our trading engines come directly from the banks themselves and voice focus have a much smaller role to play.

Typically, at this point, we see a greater uptake in technology and reduction in the size of the brokered desks. And obviously, the point being generate more high margin revenue.

Now, there's actually no reason why any of these businesses, at some point, on the left can't transition all the way across to the right and go through stages of voice, to hybrid, to fully electronic. But what we have mind you is that forcing the issue is not always the smartest move.

As I said earlier all of these businesses have traditionally been brokered in the OTC space because sourcing liquidity is difficult and, in many cases, there are just not enough secondary market liquidity to warrant full order book electronic trading.

Some of you might be thinking, but hold on this is well and good. Didn't you sell a huge part of your technology to NASDAQ last year? Well, the situation is this. We built a very strong and thriving U.S. treasury benchmark business, which we took from being brought to hybrid to fully electronic.

We then sold that business off to NASDAQ last year and move it sold the technology, but we would need to run a successful U.S. treasury benchmark business.

We sold them software, we sold them hardware, we sold them connectivity, and we sold them the associated staff. We sold all of that that is related to U.S. treasury benchmarks and only U.S. treasury benchmarks.

What we kept was a comprehensive, robust, quick-to-market and adaptable trading system. And amazing for that was that we sold NASDAQ a copy of our trading systems, the copy that was only for benchmarks. What we kept was the technology that house every other voice, hybrid and fully electronic business that sits at BGC.

So we're still left with the same technology, but we're left with technology, but actually I would confess it improved as it's evolved that supports the great many more businesses from the technology that we sold to NASDAQ.

So third, I think it's evolved. It has evolved and I say that I think it's better because I view it as being better. And amazing for that is that we sold hardware. Hardware is hardware, and we can buy that. We sold connectivity. The connectivity can be bought as well.

But what we -- what we kept was really the secret sauce especially as it related to the other businesses away from U.S. treasury benchmarks. So we still have this robust, comprehensive trading technology, but we're going to have the ability to see it evolve.

And if you look at the top left of the screen, the old eSpeed GUI -- and I mean no offense here -- it's somewhat one-dimensional because it's supporting one product yet, and that is the benchmark securities.

What we've become in time is the new cloud technology, which sits on the bottom-right. This is the technology that carries far more all the management functionality. It gives greater access to more asset classes and generally allowed our brokers and our traders to interact more efficiently in any one of the many electronic businesses in which we operate.

So this is today what an end-to-end solution looks like in the world of IDB and in the world of SEF. And this is what's needed to achieve. This takes huge investment and it takes a lot of technological know-how to get here.

If you look at the column, I mean, the products that we broker is continuing to evolve. Our customer base continues to change.

If you look at the access column, we continue to improve on our previously broker in our BGC trader view. And they in turn access our matching engines. Those matching engines is really the beast that sits in between the beautiful applications. And a lot of what we know in U.S. treasuries sit

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©2014 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 29, 2014 / 2:00PM, BGCP - BGC Partners, Inc. to Host Analysts and Investors Presentation in those matching engines. So any one of those businesses that I showed you on the left-hand side of the journey graph that is relatively hybrid, but they are somewhat hybrid could easily migrate across the fully electronic because the capacity to generate high data businesses and run high data businesses sits within those matching engines.

We talked about that we have improved matching specialty functionality and request for growth functionality and, of course, our order books are there to all of our customers to use.

Having done the execution, having done the trade, we then plug into full confirmation, affirmation, and clearing technology. And to keep on the right side of regulation we now have in place all the necessary reporting through the various data repositories. We have to have all of this and none of this is easy to achieve.

The cloud at the bottom is on there to show another highly renowned technology. When I talked about the voice brokers, I talked about the fact they use their quantitative analytical prices you've been a virtual circle because our brokers get trading ideas in pricing from our calculations in the cloud. They then talked to their customers. We've generated prices which go into the matching engines, which is a result of transaction or is a result of pricing to create more market data.

It's going to back into the cloud. It then gets calibrated. It's recalculated, generate some new set of trading ideas, a new set of prices and around it goes -- around it goes. So continually, the intelligence that we're providing to the marketplace improves and therefore generates greater electronic growth.

Jason McGruder - BGC Partners - Head of IR Just before Phil keeps going, you with the printed packs noted that it has -- can you go back one slide? You just made a little error. The printed version has Central Limit Order Book between execution and matching engine.

So those of you listening online, you don't see that. And people on the screen don't see that, but in the PDF version online and in the room -- the hard copy have central limit order book between matching engine and execution. Thanks.

Philip Norton - BGC Partners - Executive Managing Director, eCommerce Yes. A good point because central limit order books and volume match are a functionality that we've been using for a long time. Request for quote -- Jeff will touch on this, it's one of those functionality that is traditional B2D operator. We would not necessarily have used greatly. This is functionality that's been part of the B2C world, but it's something that we had to build out and embedding our technology so that we can become certain. And Jeff will touch on that as I said.

I'm not going to spend much time on this, but I have to say that all of this has given us the opportunity to grow electronic revenues which, of course, is high margin revenue, which is something that we obviously like.

We've spoken to our brokers. We have adjusted payouts for our brokers for electronic business. And this is actually fine because a lot of the business that we're generating electronically isn't just about migrating voice across the electronic. This is about generating new business that perhaps we wouldn't have seen if we didn't offer the technology source of prices in the first place.

So I guess, this goes to the question that Niamh was asking earlier. This is something that we show often, but this is really showing our fully electronic revenues as broken down by asset class and as broken down by geography. And the asset classes is particularly interesting.

If you were to look at the figures that are being published today that report the numbers of the trade and the volumes being transacted by SEFs, you could quietly be making a mistake of believing that BGC does not have a credit business or certainly it does not have a credit business that generates electronic revenue.

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Well, you couldn't be further from the truth, because actually it is the asset class that generates the greatest amount of revenue at BGC, more than rates, more than F.X. It just happens though that it isn't revenue that's being generated in a specific series of CDX and that is being executed by U.S. persons. But credit is a very large business at BGC. It is the biggest user of I.T. technology all around the world and it's the largest asset class for generating electronic revenue.

When you look at geography, traditionally, at BGC, EMEA has been the leader by geography. And that has been the case for 2004, 2005. However, about 18 months ago, the U.S. upped the pace. And at one point last year, North America was generating more electronical revenue than EMEA.

However, confusion around Dodd-Frank regulations sort of created a bit of a rabbit in the headlight situation here in the States and we saw certain peaks through Q4 2013 and different activity out of the States, which has meant that the EMEA is again, for now the largest region by way of contribution of electronic revenues.

We believe that will change. We believe if people become more comfortable with regulation, we will see the Americas uptick and we think that the revenue generated electronically will be more in line with the revenues that are going to grow across the business as a whole, which North America region will be our strongest center.

So we are generating growth in electronic revenue. We're growing steadily and we're growing nicely. And as I said, this is high margin revenue and we like high margin revenue.

Our average annual growth rate from 2009 to 2013 stand at 49%. And 2014 Q1 has started particularly well through the course relative to the same quarter in 2013. The growth rate is 9% year-on-year.

Now whilst 9% rate of growth is not something that we think, considering the difficult market conditions, we are pleased it actually able to generate growth than the rest of the market is struggling. [Connectivity] is low. Banks have retrenched, but we continue to grow our electronic revenues.

We've seen many, many opportunities to migrate many of those great businesses across the electronic and, of course, I am excited every time Shaun tells that we're buying a new business because that presents new opportunity to introduce technology to people that has previously not had it. So we are confident that we will see a continuation in the growth of our electronic revenues.

I just want to focus on some specific areas that if I'm comparing Q1 '14 to Q1 '13 - have performed strongly. Globally, we are up 9%. In the Americas, it's probably been the strongest region -- the strongest region and it's up 21%. That growth has been largely driven by our credit asset class, which is up over 100% electronically in North America Q1 versus Q1. More so, it's been boosted by strong rate performance, which is up at 39% for the same period.

Credit in Europe is up 56%, which means that globally credit as an asset class was up 64% year-on-year comparing Q1 2014 versus Q1 2013.

Globally, rates were up 8%, and this has been drive by strong performance in inflation of the U.S. treasury swaps and interest rate products.

Now if we put some of those businesses inside of those asset classes, I'm going to quickly talk to 3 that all used a mix of voice, electronic be that order book or volume match to generate revenues and realize growth, but who use it in very different ways.

Firstly, if we look at emerging market bonds, this is a business that has an order book and has volume match. The order book, unfortunately, largely spend a lot of its hours sitting relatively empty. And that is because there is not natural secondary market liquidity and emerging market bonds. People are scared of putting prices on a screen for fear of pushing a counter away.

So what happens to these brokers, you have great relationships, continue to voice broker throughout the day, but then they will run a series of volume match sessions, having saw interest in specific instruments and created a new true independent start price for that volume match session, and they trade electronically through that session.

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So that generates electronic revenue for us, but the upside is that post volume match session we get follow-on interest on the phones where people ring up having not wanted to price the screen themselves and say -- hey, if you trade it at $10, I could sell $100 million, I could buy $25 million, and we do further business. So this is a use of technology that improves our electronic revenue, but also both voice.

If you look at treasury swaps, again same technology, same order book, but the order book is quite different. The order book is populated and the order book had tight prices all day long. Those prices are input by customers. Those prices are input by our brokers. This is a traditional voice relationship business that works very well with technology.

Now, there's type on the screen most of the day and normally the type you see. But you do not see a huge amount of order book transactions. If it's margin, the title is business its people choose not to pay away the bid offer spread.

What tends to happen is that we run volume match sessions at a pricing side of it but off the spread, and people will come to transact on that price. So spring liquidity tight, but the majority of electronic revenue is generated through volume match sessions rather than through the order book itself. And that business is at 190% Q1 2014 versus Q1 2013.

And finally if we look at ITRAXX, ITRAXX is probably the biggest in my view of the old U.S. treasury markets. We have an order book that is heavily populated with prices, and we also volume match sessions. And most of those prices on the order book are input directly by the customers themselves. 90% of the prices find their way on by customers themselves.

Volume match sessions get launched and so it's a trade through the order book, it's a trade through the volume match session, but also it's on a concept called All-Day Volume Match. And some people thought that works is instead of having a specific volume match session we'll run a season volume match session throughout the course of the whole day that starts with the starts with dynamic and altered as the price changes on the screen.

What this mean is that bank customers that are served and their customers can always come to our screen and try and transact at mid price inside of the bid offer. So can in the knowledge, if they can't find an opposite interest and they can still find that spread and transact on that bid offer.

So those are three different focuses that all use the same technology to all trade a mix of voice and electronic. And I guess, the skill is identifying which businesses at BGC, when they come to the point of using technology use what mix. But the key is that we have choice and we have the ability to introduce the different forms of execution.

And if I look at our fully electronic spot F.X. business, this is a business that is doing incredibly well. It uses a form of mid market electronic execution, but it does not use volume match.

As you well know, the F.X. market has been electronic for a very long time, and we were one of the first, well-entrenched strong opposition in that marketplace. We effectively gate-crashed the party. We've been disruptive. We've come to the F.X. market with an alternative trading paradigm that we've been able to build on the legacy technology that was eSpeed, and they represented a great solution to the F.X. marketplace in today's markets.

The spotlight is very much on that business at the moment for the wrong reasons. It's that people, our customers seem to enjoy trading on a product that is fully electronic.

The average growth for that business from 2009 to 2013 is up 35% per year, which is impressive in its own right. But I think there becomes more interesting and more illuminating if you look at the volume numbers, which is a way that many people compared performance in the foreign exchange marketplace.

BGC's fully electronic spot F.X. volumes for Q1 2014 versus Q1 2013 are up by 20%. If you compare that with the industry with the competition, you can say that the performance is exceptional. It is even more impressive when you look at the month of April versus the month of April where we were up over 30%, and you can see the industry was not.

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This spot F.X. solution for BGC has always been a winning solution. You just would see it's winning more. When the market improved, market conditions improved and spot F.X. volumes got, generally then we are positioned to take ever greater market share.

Now at this point, I'm just going to hand over to Jeff who is going to give you an update on regulation, and I'll come back to give you an update on our market data services. Thank you.

Jeffrey Hogan - BGC Partners - Managing Director, Business Development Thank you, Phil.

I want today to take a pause in the never-ending information flow coming out of Dodd-Frank, which has been going on ad nauseam for several years and describe the impacts of those rules really on our business today and what we're doing about implementing the rules today both in the United States, Europe, and by extension in Asia, and then project the impact of these rules on our business in the short-term.

So all of you know that Dodd-Frank has been blanket to overlaying our business for well since 2010. But, really the mind space of people thinking, worrying, commenting and becoming experts of Dodd-Frank greatly exceeds the market space and the impact that Dodd-Frank on the existing businesses within BGC.

So if you look at the waterfall of dates ahead of you on the slide, you'll really note 3 things, which I want to discuss. One is the broad implementation for Dodd-Frank and the SEF components of Dodd-Frank for execution, clearing, and reporting of derivatives is largely behind us. So the heavy-lifting, the implementation work, the build-out work, the creativity work within BGC, and the cost and effort associated that is largely behind us. And all of those weapons are in the bank for us to activate going forward.

Secondly -- and this is where things get really interesting is you'll note that the rules in Europe and Asia have really yet to come. So what that means is that the CFTC and specifically the Division of Market Oversight within the CFTC has been the force that's really driving the agenda.

And because of the delays of interpreting Dodd-Frank, I mean, since Dodd-Frank has been a law, we've spent the last 4 years really looking at the commission, define some of the rules, work through no-action letters, work through no-guidance, and implement the rules on the cold phase. Because the interpretation of those rules are still very much happening now, the behavior of our customers remains uncertain and customers looking to see how the rules are going to be implemented in Europe and Asia has meant that for people trading globally, which is our customer base, there remains uncertainty whether the onset or offset behavior of our customers will become permanent.

And also you'll notice at the top line when the G20 met in Pittsburgh way back when, they had said the G20 countries had agreed. They sat around the campfire, they're singing Kumbaya, and they said we're going to do all these by the end of 2012.

And as Shaun referred to earlier, you can see on the projection -- this is only a projection -- the main rules outside the United States, which is the MIFD II reform are scheduled to be implemented and nailed down not until the first quarter of 2017. So guess what, we're only halfway through.

So the manifestation of that on our customers has meant that the incentive and clarity and motivation for them to change their behavior has been less. Speaking of which they have needed to change their behaviors much slower than they expected and the regulators expected, and we expected because we build out to be compliant with Dodd-Frank.

On July 15, 2011, when Dodd-Frank is meant to be implemented, those of you keeping score at home will remember that the original rule in Dodd-Frank relating to SEFs said all markets are going to be fully electronic. So Phil and his team globally working behind the scenes created the technology, created the functionality, having central limit order books available, building RFQ technology, so all of the businesses that we are running worldwide.

And also you're a member, the distinction between this small number of acquired businesses and the very large number of permitted businesses all of those are supposed to be on SEF. They were all supposed to be completed electronic. The switch was flipping in 2011.

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So what happened? Interested party such as BGC got on the Acela from New York to Washington every week, met with the commission, met with regulators, helped them make an informed decision about how the markets actually work and they came up with the phrase -- state commerce.

So what's happened is even though when you read the newspaper and all the journalists feel that the markets are going electronic now while BGC is prepared because we had to be prepared to be compliant, what's actually happening is the traders especially offshore with the cross-border rules not being formalized, they need our brokers. The hybrid model is what's keeping the markets going so we're well-positioned when the number of products that are required to be executed on SEFs increases. But that's actually not what's happening now.

But if you look at our SEF, and I don't want to belittle the efforts from our technology teams and our management, and our sales people, and our relationships with our customers, if you look at how we're performing and we're performing and competing furiously on our SEF and doing well on these products, it's actually a relatively small slice of our businesses.

So the acorns that Phil referred to, which I'll call them seeds, many of these businesses are saplings and many of them will become the oak trees. But this is a graphic example, and these green jellybeans are even a subset of all of our businesses. But this is a graphic example.

If you look at interest rate swaps in 3 currencies, if you look at credit products in 2 currencies, and the only other product that's going to become required and when I use the word required, that means that subject to execution rules on SEFs, there's only going to be NDFs and that's only a maybe before the end of 2014. So the motivation of our customers not to use the hybrid model at least until the end of 2014 and looking years ahead is low because of the relatively small number of products that are required to be traded on SEFs.

Now I'll also go back to the SEF rules and remind everyone that the Dodd-Frank rules relating to SEFs refer to standardized derivatives contracts. And as Phil alluded to earlier, as it turns out, after the commission wrote the Dodd-Frank rules they realized that there are very few marketplaces that fill that definition and that's why there are very few products that are required.

Even within the required products, and I think when people think about derivatives, they think interest rate swaps, they think U.S. dollars, sterling and euro interest rate swaps as being the driver of products trading on SEFs. Today 80% of the dealer-to-dealer U.S. dollar interest rate swap market -- guess what -- is executed by our hybrid brokers by voice.

75% of the euro interest rate swap market, even given our preparations and the fact that if the switch were flipped we could go fully electronic. Those trades are done by voice and those trades are done by voice because our customers as I said are uncertain. I mean, when I was coming in the -- over the lunch hour and we're still getting calls from traders and our biggest customers that are unsure of the exact implementation of a specific product - a series ITRAXX, particular series, a package trade.

And when you look at the waterfall of dates that I put up from 2010 through 2017, as it happens what's happening now is actually pretty interesting because -- again those of you who have insomnia know that we're keeping track over the minutia of the SEF rules, late at night there's a relief being given on packages now. So there's also relief being given on packages now relief being given on cross-border trading.

But because the rules and the waterfall implementation of the rules again has uncertainty, people are seeking out our voice brokers. Our voice brokers are providing consultation services really due to the internal education and awareness that Shaun has set up with all of our desks. So that helps drive those two things -- it drives business through our voice brokers.

And actually for us and to Shaun whose mission is to have every price up on the screen to be prepared for the firm to go fully electronic globally in every product, Dodd-Frank has been a huge benefit for us because it's accelerated the need for our voice brokers to type on screens and make sure all of our businesses are legitimately hybrid.

So as a result of that, really after all the work, after all the preparation, after all the education, after all the discussions with customers, what is SEF really mean to BGC today. And I'll remind everyone that SEF means swap execution facility and that means multiple means of execution. In fact, the actual term in Dodd-Frank is any means of state commerce. And what BGC has done is prepare the groundwork because our customers and the management of our customers, they're relatively poor predictors of their own behavior going forward.

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So we met our customers in 2011. What's going to happen? Everything is going to be on SEF. The market is going fully electronic. Everybody is going to type.

But of course, if we believed them, we wouldn't have built our RFQ, we wouldn't have maintained our battalion of voice brokers. Shaun wouldn't have made sure the voice franchise was robust. But, of course, our mission is to be agnostic on how our customers do business with us.

We're not driven by the regulations, but we need to be compliant and our customers rely on us to be compliant for them. So our mission in meeting the regulatory conditions going forward not just in America, but in Europe and in Asia is to make sure we provide optionality for the customers to execute based on their current business needs and how the regulations will roll out going forward. And the fact that we're close enough with the regulatory bodies and the national supervisors in each of those countries that we can anticipate the rules as they come out.

And by the way, just to make a forward-looking statement, the rules in Europe have already addressed the elements of voice executions. Within the MIFID II reform, there's a term called OTF, which is Organized Trading Facility, which is an adjunct to the MTF, the Multilateral Trading Facility which BGC has one, BGC Brokers L.P. which had MTF since MIFID I came out in 2007, which is a natural complement to our SEF. And the OTF means that when the MIFID II rules come out it would be embedded for the capacity of our brokers to continue to take prices over the phone, type them in the screen, interact with order books and have a legitimate hybrid marketplace.

And we already know, speaking closely with the authorities in Hong Kong, Japan, Australia, and Singapore that they are going to be focusing on the reporting and clearing of transactions and not the execution of transactions, so we're highly confident that are our current structure and foundation has been hybrid brokerage. We'll be able to continue to operate globally so we can maintain the pace of the build-out with the rules.

And as Shaun said, our brokers are incentivized to get prices up on the screen. They're typing on the screen and interacting with order books is the way forward so we're very optimistic that while behind us it's engaged a lot of our time. It's laid the groundwork to be compliant, provide optionality. So we're actually looking forward to the continuing roll-out of the rules and the intersection of that with our hybrid operations going forward.

And with that, Phil, I'll turn back to you to discuss the market data without stealing your notes.

Philip Norton - BGC Partners - Executive Managing Director, eCommerce So investment in technology is key to being relevant going forward. All of the different businesses that use technology generate huge amounts of data and has presented another opportunity to BGC.

Traditionally, prior to the sale of eSpeed, a large part of our data business was built around selling the data of that particular business. And that was fine. We no longer have that. So what we have now is the opportunity to take a good look under the bonnet, assess what it is we are doing by way of product set, and to also look at the other way of distributing data.

So we're now focused very much on all of the different businesses on BGC Trader, capturing that data, keeping it in our cloud and then packaging out in a way that we can sell it out to our existing customer base and to a new and evolving customer base.

The difficulty has always been that we've tended to sell a lot of our data through our trade interface, which was fine that was effective for treasuries, but we've now struck up partnerships with new vendors. The obvious one with a new breed of vendors as well, you have a significant amount of desktop real estate who are prepared to carry our data to a new customer base. So one see this as an area to grow.

The revenues to date on the retained business are small, and we recognize that. But the opportunity to grow is there. And year-on-year we're basically up 38%, and we see this as an area in which we can consume to grow going forward.

So whilst retained revenues are not what they were, the opportunity to grow is significant, and we believe if we can continue to take businesses and turn them electronic then we'll see growth in our market data revenues.

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And that is it for me. Thank you.

Jason McGruder - BGC Partners - Head of IR So Shaun is going to do the conclusion and we're going to do Q&A.

Shaun Lynn - BGC Partners - President Thank you everybody for your time and listening to us babble on.

I think not to reiterate the whole last 3 hours, but that's not really going to help anybody. The few key points across as I've said and everyone else have said accretive acquisitions has been key to us going forward.

Adding some of the staffs either from real estate or from financials is going to be absolutely key. Expanding our technology regardless of whether it's going to be regulatory-driven or just generally market-driven is going to be key in financials, but also in regards to real estate as well where we support NGKF and keep them at the forefront.

To grow our customer base because of the regulatory environment had changed the landscape for all of us as I kept speaking about the ripples in the water, to grow energy & commodities which -- and I spoke about and is going to be the main key focus from a financial perspective for us.

NGKF is going to grow the global corporate services with Michael and his team, and with the great aid of Graham and his team we'll cut our expenses and continue to do that not just from a broker perspective and front office but also so from the back office as well.

We feel that each of these assets and businesses have a significant value and we have been undervalued before, and Graham spoke to that on how we've all traded along the banks and we saw that's unfair.

So with that, I'd like to open up some questions that anybody might have before me or the rest of the panel.

Jason McGruder - BGC Partners - Head of IR Jillian Miller from BMO

Jillian Miller - BMO Capital Markets - Analyst Based on that last comment you mentioned you think you're undervalued and I think Howard said in the past that at some point, if you felt like you weren't getting the value of real estate or, some of these other businesses like your electronic credit F.X., whatever, it could be something that you look to divest like you did eSpeed because you weren't getting the value out of this that you thought it had. So just get an update on your thinking along those lines.

Shaun Lynn - BGC Partners - President I think we always keep a watchful eye on the marketplace on how we perceive. Would we split the company? I think we would look at it, but we haven't done it so far and we're not currently thinking about that. But it's something that we keep a watchful eye on.

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Jillian Miller - BMO Capital Markets - Analyst Okay. And then I think you guys have said like 80% of U.S. dollar swaps are voice, 75% of euro swaps are voice, and it's because customers are uncertain about the implementation of some of these rules. Should I be expecting us to get certainty not until 2017 when everything is done being implemented or is this something that you think clarity is coming and we should see some of these products move more towards central limit order book or kind of what's the expectation there.

Shaun Lynn - BGC Partners - President Well, from my perspective that timing is now. We are pushing as hard as we can to take markets fully electronic. That's going to -- whether it's now or in 2017, it's coming. So we need to continue keep driving that and creating the best technology that it's going to bring the market electronic. There is obviously resistance with regards to transparency, in regards to the brokers, the brokers or even the trader themselves.

We recognize that that's where it's going. We have to take it there and we're going to continue to keep pushing. So I would say 2017 you should expect us to continue to chipping away, growing our electronic offering and growing our market products within that business to make them fully electronic.

Jillian Miller - BMO Capital Markets - Analyst Okay. And then just one more question, I think maybe six months ago I would have said I felt like the banks are pretty much done delevering or we had done those of what we are going to do, we're kind of at the trough and can only go up from there. But it seems like it's reaccelerated and there's more to come with Basel being enforced.

So I like your perspective on where are we in the cycle, how much more delevering do you guys expect? When do we actually get to the new balance sheet level for the things where we can say we're at a trough?

Shaun Lynn - BGC Partners - President I wish I had that crystal ball. It's still on-going -- in regards to delevering, I think it's going to continue for this year. We're looking forward to 2015. We're looking for rates to rise at the end of '15, middle of '16. But we don't have that crystal ball. So each day you're seeing more news various banks, various institutions where they're having to readjust their business plan and the market presence.

Others are reinvesting, and you'll see Asian and other South American banks try to pick up that market share away from the traditional incumbents. But that will take time. And you're seeing a lot of good quality traders leave the banks (inaudible). They can't stay there for their own reason -- if financial being balance sheet, if they can't make the money for themselves and for their families and don't enjoy what they're doing anymore. And we're certainly seeing that in the U.K. with some of the U.K. banks that are pretty much government-owned.

So in essence we are in the eye of the storm, but the positive side from us is that we recognize this quite some time ago, we reinvest in our electronic trading, we reinvest in our company to bring other companies in moving to other products, investing in NGKF.

You have to take the company as a whole not just within financial service we recognize very quickly that Barry and his team are going to get a much better value potentially initially from financials. We focused on in financials was cutting costs, readdressing the brokers where we are in the contracts. They are on add costs. And then grow certain businesses such as energy and commodities.

But still pushing electronic trade, keep pushing the market change because the outcome which it's easy to push it, but it's just that first initial few inches with regards to the banks and getting the brokers to understand and the markets to understand.

Dodd-Frank was that. Dodd-Frank was pushing the whole market case and now we got to keep driving it.

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Jillian Miller - BMO Capital Markets - Analyst Thank you.

Niamh Alexander - KBW - Analyst Shaun, can you give us the margin potential in the businesses -- the real estate because you've been improving it. I'm just trying that the fully operation levels, what's the peak margin? What do you think it could get to in a good environment that's scaled up in the financial services.

Sean Windeatt - BGC Partners - COO I mean, 2 things, again a definitive example, but think about it in the real estate. Although we've had huge growth, we've been in terms of revenue, still a long way to go. We've gone from 8.2% up to 11% in one year, and that's really the scale. That's from the scale of $626 million of revenue. So we would expect that to be able to increase.

For the final number, I think it's difficult, but I want to say it can increase from the level that today.

And then in the financial services business, that's twofold. Despite the sale of eSpeed, our absolute number and the margin were actually higher than they were a year ago at 15.1%.

What we've always said is we have -- because of the parted structures we have the flexibility and the contract, that's enabled us to drive up our margin up to 15%. Can that go higher? Of course, but we must do it.

I think what we've shown is we can do it in a challenging environment, so it can increase further, but it has to be a fine balance between profit margin and, of course, converting the business electronic in a way that we control the payouts. So the answer is they can both go north, but to put a definitive number though is difficult.

Jason McGruder - BGC Partners - Head of IR Just one thing you've -- on your real estate question, I'm trying to go back to that slide. It's really far ago. But in Graham's section where it shows margin mixture, higher margin, lower margin, it depends on the mix, also what growth of real estates. So capital markets, GCS seems to be higher margin leasing in sort of the middle of property and facilities management a little bit lower.

Any other question? Oh, you're still...

Niamh Alexander - KBW - Analyst Yes, if I could. Just, Graham, on taxes, that the effective tax rate on the P/E is it's a great rate is the bottom line, the dividends because being a cash flow statement, it's kind of like the cash taxes you're paying. Give me a sense of the sustainability.

Graham Sadler - BGC Partners Yes, that would be sustainable for the foreseeable future. Obviously, then you got a long way out, but then you're subject to change in the mix of the business between locations which can affect the tax rate. So I can't sort of predict it forever, right, in the foreseeable future we think it's sustainable.

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Niamh Alexander - KBW - Analyst And why is it so low? I mean, is it really due to the compensation structure?

Graham Sadler - BGC Partners Partly and because of our mix of operations around the world.

Niamh Alexander - KBW - Analyst Okay.

Jason McGruder - BGC Partners - Head of IR Jason, can you get Alex Kramm from UBS here?

Alex Kramm - UBS Securities - Analyst Hey, thank you. I want to come back to the commodities and energy discussion from earlier. I mean, you've touched upon this a little bit, but obviously, what we've seen has been the big banks and brokers have -- I don't want to say shutdown, but they certainly compressed those businesses and some of those desks have traded. How does this impact you? I mean, are there opportunities for you to pick up traders there or have you actually looked at some of those businesses from some of the larger banking brokers or they're just completely different businesses related to what you are trying to do or doing?

Shaun Lynn - BGC Partners - President It's a combination. You've seen some of the banks we trade back from actual physical trading rather than listed because I think that's very capital-intensive, so and it's mainly traditional investment banks. The likes of DB or some of the major traditional clients within commodities and energy have stayed in the market and is continuing to grow. Yes, of course, we would hire salesman that might come in with relationship that is going to help us grow and build that business.

The market has had an incredible run for the last 2 years and it's continuing to do so. But from that standpoint, it's a double win because you've just seen the size that we are today. 2013 $31 million compared to our other competitors, and we are growing into that space.

So, yes, we look to hire those people and it doesn't phase us with the traditional investment banks are pulling away as I'm understanding because of the balance sheet they're going through. But still with the key traders and the key market makers are still within the market.

Alex Kramm - UBS Securities - Analyst Okay, great. And then secondly, and I think that comes back to what Jillian have asked earlier about capital requirement leveraging and so forth. But when you talk to some of the heads of FICC businesses across the street, the complaints that you hear all the time is like capital ratios are going up, getting more spent-driven. The other day some of these products that they're offering they don't even make sense anymore because you essentially price the end customers out of the market because they have to pass the costs, too.

And I guess a lot of this is related to Basel III and other rules. So maybe to some degree, can you contrast like your capital and regulatory requirements to that other bank? And I know you have certainly different businesses, but are there businesses that you see out there that the banks and brokers

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©2014 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 29, 2014 / 2:00PM, BGCP - BGC Partners, Inc. to Host Analysts and Investors Presentation have to exit that there's this opportunity - where you can - because you have different regulatory requirements, can offer something that you are not in today and actually help these guys.

It's a lot of question, but hopefully you see where I'm trying to get to.

Shaun Lynn - BGC Partners - President Remember the banks are trading their own portfolio, their own book, their own balance sheet. We don't. We don't take position. We don't have positions that we are trying to sell or offer loan. You don't have to sell my book here. We don't. We start with a blank sheet every morning. Our operating costs are much, much lower than any bank would be plus we can talk to all of the clients, and we've got 1,500 brokers that are just doing that every day. They're going to gear up broking, using the technology. We get around the market much quicker than they ever would, and it's much more cost-effective for us.

So yes, we're moving into some of the markets that they're moving out of, absolutely. They can't afford to actually cover all tiers of investors. For us, it's a great great tool. As I spoke about French banking and whatever earlier, we see this as for the next 12, 18, 24 months we can growing slowly, surely this part of the business with our agency broker.

Jason McGruder - BGC Partners - Head of IR Anybody else? Alrighty, then so for those on the webcast we're going to turn the webcast off and thank you for listening. And for those in the room, thank you for coming, and we hope to see you next time in one of the events.

I'm Jason and the other guy is also named Jason, so come to us if you want to follow-up with any one of the management. Thanks.

Shaun Lynn - BGC Partners - President Thank you.

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