BGC Group valued at $667 million following investment by major banks

BGC Group announced that its exchange platform, FMX Futures, is now valued at $667 million after receiving investments from a notable consortium of financial institutions.

The consortium includes major banks such as Bank of America, Citigroup, Goldman Sachs, JPMorgan, Wells Fargo, Barclays, Morgan Stanley, and market maker Citadel Securities.

These institutions have acquired minority stakes in FMX Futures, positioning the platform as a major player in the financial markets, particularly in the interest rate markets. Howard Lutnick, chairman and CEO of BGC Group, highlighted the strategic collaboration of global investment banks and market making firms aimed at establishing a premier trading venue.

“We have brought together ten of the most important global investment banks and market making firms to create a premier trading venue for the interest rate markets,” said Howard W. Lutnick, Chairman and CEO of BGC Group and Chairman of FMX. “We offered ownership to this incredible investment group knowing the enormous value they bring to FMX, which will benefit all market participants.”

FMX Futures, which received regulatory approval earlier this year, is set to launch operations in September 2024. The platform will offer trading in Secured Overnight Financing Rate (SOFR) futures and U.S. Treasuries. This move places FMX Futures in direct competition with CME Group, particularly at a time of heightened volatility in bond markets and ongoing debates about potential shifts in Federal Reserve interest rate policies.

This development came alongside other corporate news, including Barclays reporting a smaller-than-expected 12% drop in first-quarter profits. Meanwhile, CME Group announced a profit beat for the same period, driven by record growth in futures and options contracts related to U.S. Treasuries.

“With support from these leading financial firms, we believe FMX will become a rapidly growing futures platform and create important efficiencies for our shared clients,” said Lou Scotto, CEO of FMX. “With our clearing partner, LCH, the largest clearer of interest rate swaps in the world, clients will receive significant portfolio-margining capabilities, creating competitive advantages across U.S. interest rate markets.”

“LCH is excited to partner with FMX to deliver product innovation and margin savings, which will enhance the competitiveness of U.S. derivatives markets for its members,” said Isabelle Girolami, CEO of LCH Ltd.