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Cushman & Wakefield and BGC launch property derivatives joint venture
17 Jul, 2006, London
Cushman & Wakefield Finance Ltd, the finance arm of global real estate services firm Cushman & Wakefield, and BGC International, a leading inter-dealer brokerage firm, have today announced the signing of a joint venture agreement where the two firms will co-operate to provide strategic solutions and execution services in the rapidly growing property derivatives market across Europe.
This co-operation, marketed as "Cushman & Wakefield BGC", intends to ensure that the firms become leading players in the fast evolving property derivatives market, and that they can provide strategic solutions to clients through a combination of market insight, pricing information, structuring of products and trade execution services.
Cushman & Wakefield BGC expects to significantly increase liquidity in the market by offering vanilla derivatives priced against indices such as the Investment Property Databank (IPD). In addition to growing liquidity and trading volumes, Cushman & Wakefield BGC is committed to developing innovative, structured products that are tailored to end user's specific requirements thereby helping the market reach its full potential.
Together, the firms will target new clients and the existing extensive client contacts of both firms comprising banks, hedge funds and traditional property market participants (investors and occupiers) who wish to maximise returns and manage risk, through the innovative use of property derivatives alongside more familiar derivative products.
Combining Cushman & Wakefield's in depth property and finance expertise with BGC's leading derivatives trading platform, broking and execution services worldwide, the two companies will draw on the extensive global resources of both firms and will be managed by a joint steering committee, comprising David Erwin and Luca Giangolini of Cushman & Wakefield, and Jon Masters and Nick Ruddell of BGC. Alex Dewey, a derivatives expert at Cushman & Wakefield, and Mark Harris of BGC will be responsible for the day to day provision of services.
The growing property derivatives market enables participants in the property and financial market sectors to manage risk and return from exposure to property, without buying or selling the underlying physical asset. Although the property derivatives market has so far focused on the UK, it is expected that increased liquidity will encourage greater participation from other European countries and even further afield over the longer term.
According to the IPD, volumes of property derivatives trades totalled £850 million last year and these are accounted for by many potential users only now beginning to gain approval to participate in the market. With such huge potential reflected in currently small, but growing, volumes, Cushman & Wakefield BGC has timed its entry into the nascent property derivatives sector at the point at which the market has gained sufficient momentum and is poised for exponential growth.
Commenting on the joint venture, Bryan Laxton, CEO of UK Capital Markets at Cushman & Wakefield said, "Having taken time to monitor this emerging sector and to find our ideal partner, we are entering the market at the perfect time. Cushman & Wakefield BGC will help increase market liquidity and trading volumes but more importantly, we are already developing increasingly sophisticated derivative products and solutions that end users really need. As the market matures, we expect Cushman & Wakefield BGC to be a market leader amongst a small handful of quality players."
Nick Ruddell, Managing Director at BGC said "We have spent a considerable amount of time researching the market and are delighted to be forming a strategic alliance with Cushman & Wakefield to help the property derivatives market reach its full potential. Both companies have large, global client bases that we are sure will welcome the diverse and exciting opportunities available within the sector."
About Cushman & Wakefield
Founded in 1917, Cushman & Wakefield is the world's pre-eminent commercial real estate services firm with more than 11,000 professionals in 189 offices in 57 countries. In Europe, Middle East and Africa the firm's operations extend to more than 1,500 professionals in 33 countries. The firm delivers integrated solutions by actively advising, implementing and managing on behalf of landlords, tenants, and investors through every stage of the real estate process. These solutions include helping clients to buy, sell, finance, lease, and manage assets. Cushman & Wakefield also provides valuation advice, strategic planning and research, portfolio analysis, and site selection and space location assistance, among many other advisory services. To find out more about Cushman & Wakefield, visit www.cushmanwakefield.com
BGC Partners is a leading inter-dealer broker, providing integrated voice and electronic services for wholesale market participants worldwide. BGC is active in the global fixed income, interest rate, foreign exchange and derivative markets, offering both telephone and screen-based price discovery, trade execution, straight-through processing and access to electronic trading services from eSpeed Inc. (Nasdaq: ESPD). The firm has offices in London, Paris, New York, Tokyo, Hong Kong, Singapore, Sydney, Nyon and Milan.