C&W, BGC Launch Euro Derivatives JV

This joint venture, marketed as "Cushman & Wakefield BGC," intends to make sure that the firms become leading players in the 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 maximize returns and manage risk through the innovative use of property derivatives alongside more familiar derivative products.

Combining Cushman & Wakefield's 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 daily 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 those beyond over the longer term.

According to the IPD, volumes of property derivatives trades totaled £850 million last year and are accounted for by many potential users only now beginning to gain approval to participate in the market. Financial terms of agreement were not disclosed.