Cantor Fitzgerald open to going public

By Joseph A. Giannone

NEW YORK (Reuters) - Cantor Fitzgerald, a private investment bank growing by leaps and bounds, for the first time said it is considering going public as it accelerates expansion plans in a world without rivals such as Bear Stearns and Lehman Brothers.

"Could Cantor Fitzgerald become a public company? Sure," Chief Executive Howard Lutnick said at the Reuters Global Finance Summit in New York on Monday.

"You know we're not wrestling with (that option) today because we just raised $500 million. The next step will be, what's our next move? We'll have lots of opportunities. Going public is just one of them," he said.

Cantor is a closely held partnership known as one of the world's largest brokers of bonds between securities dealers. It survived the deaths of 658 of the firm's 960 New York employees in the September 11, 2001, attack on the World Trade Center.

Under Lutnick, Cantor has thrived, expanding into institutional bond trading, building up equities and investing in a number of new businesses.

The firm, now based on the lower floors of a nondescript building in midtown Manhattan, recently sold $500 million of 10-year debt in a private placement to give it $1.5 billion of capital. Lutnick said the firm has about $20 billion of assets, mainly in Treasury and Agency debt.

Lutnick said Cantor does not need to raise new money at the moment, but acknowledged its hiring and expansion ambitions are now greater than ever.

That, he said, could lead to an initial public offering in the future.

"I think it's a matter of opportunity, of use of capital, of where the debt capital markets are," he said.

To the extent Cantor Fitzgerald does go public, it would hope to be lead underwriter, but would expect to work with other underwriters, too, Lutnick said.

Lutnick previously resisted talk of taking the partnership public and inviting the scrutiny that comes with listed stock.

Cantor last year merged its listed Internet bond broker affiliate, eSpeed Inc, with interdealer bond brokerage BGC Partners (BGCP.O), which does business now as BGC.

SUPER-EXPANSION

In the meantime, Cantor is getting a lot bigger. The 3,800-employee firm could be considered the country's largest investment bank, Lutnick said, after Goldman Sachs (GS.N) and Morgan Stanley (MS.N) became bank holding companies last fall.

He said he expects to add about 40 more bankers and traders this year, and another 100 in the 2010 first quarter -- just for starters.