BGC Group (BGCP) Barclays 22nd Annual Global Financial Services Conference summary

Business overview and market environment

• Largest global wholesaler in bonds, equities, and commodities, benefiting from rising global trading volumes.

• Zero interest rates from 2008 to 2022 led to stagnation, but the return of real rates has reignited growth.

• Predicts a 10% core growth rate for the foreseeable future, supported by structural market changes.

• Banks are reinvesting in trading, driving secondary market activity and benefiting the ecosystem.

• Business model thrives on trading volume, not market direction, with superior technology and performance.

Treasury business evolution and strategy

• Sold dominant Treasury business to Nasdaq in 2013 due to low-rate environment, reinvested proceeds in commercial real estate.

• Spun off Newmark, a commercial real estate brokerage, to shareholders, now valued at $3.5 billion.

• Re-entered Treasuries in 2018, building a faster, more flexible trading system with innovative features.

• Gained market share sequentially for 15 quarters, now holding 30% share, with unique proprietary volume advantages.

FMX futures exchange launch and competitive positioning

• FMX, a new futures exchange, is launching in September 2024 with a soft opening, targeting full FCM integration within a year.

• System already installed globally, focusing on interest rate and Treasury futures, the top two products by volume.

• Unique cross-margining partnership with LCH offers significant margin savings, breaking CME's competitive moat.

• Backed by 10 major trading firms and banks, who invested $172 million for a 25% stake.

• Predicts FMX will achieve record open interest for a new exchange by end of year one, with 50% market share as a long-term goal.