CBRE Group, Inc. (CBG)

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CBRE Group, Inc. (CBG)

Acquisition Call

November 1, 2011 5:00 PM ET


Nick Kormeluk – SVP, IR

Brett White – President and CEO

Jim Groch – Chief Investment Officer

Gil Borok – EVP and CFO


Will Marks – JMP Securities

Sloan Bohlen – Goldman Sachs

Brandon Dobell – William Blair



Ladies and gentlemen, thank you for standing by. Welcome to the ING REIM closing conference call. At this time all participants are in a listen-only mode. If you have an opportunity – you will have an opportunity to ask questions after the presentation. (Operator Instructions) As a reminder, this call is being recorded.

I would now like to turn the call over to our host, Mr. Nick Kormeluk. Please go ahead.

Nick Kormeluk

Thank you and welcome to CBRE’s ING REIM closing presentation and conference call. Yesterday we announced that we completed the acquisition of ING REIM’s operations in Europe. The purpose of today’s call is to share additional details about this acquisition and its benefit to CBRE.

This conference call is being webcast and is available on the Investor Relations section of our website. Also available is a presentation slide deck posted about 30 minutes ago, which you can use to follow along with our prepared remarks. An archived audio of the webcast will be available on our website later today. Please turn to the slide labeled Forward-looking Statements.

This presentation contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future growth momentum and financial performance, as well as the successful integration of the acquired ING REIM businesses, our ability to leverage the integrated platform to grow our market share and the projected performance of and risks relating to the acquired ING REIM businesses relative to the price we paid.

These statements should be considered as estimates only and actual results may ultimately differ from these estimates. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that you may hear today.

Please refer to our third-quarter earnings report filed on Form 8-K, our current Annual Report on Form 10-K, our current quarterly report on Form 10-Q, in particular any discussion of risk factors or forward-looking statements which are filed with the SEC and available at the SEC’s website,, for a full discussion of the risks and other factors that may impact any estimates that you may hear today. We may make certain statements during the course of this presentation, which include references to non-GAAP financial measures as defined by SEC regulations.

As required by these regulations, we have provided reconciliations of these measures to what we believe are most directly comparable GAAP measures, which are attached hereto within the Appendix.

Please turn to slide three. Our management team members participating with me today are Brett White, our Chief Executive Officer, Gil Borok, our Chief Financial Officer and Jim Groch, our Chief Investment Officer.

I will now turn the call over to Brett.

Brett White

Thank you, Nick, and good afternoon to everyone on the call. I think you all are familiar with Nick, Gil and myself, although, many of you have not met Jim Groch. Jim is our Chief Investment Officer. Jim was also the lead negotiator on these ING-related transactions. I don’t think there is an aspect of the acquired business that Jim isn’t fully aware of. And I suspect you’ll be hearing more from Jim during the Q&A. This presentation is split into four sections.

The first section is just a list of headline points I am going to run through with you briefly. Then, Jim will present the slides that discuss the fit between the ING acquired business and our Global Investment management business, and also some fairly deep discussion around the nature of these funds, how fees are paid, those sorts of things. And by the way, we have never in any of our earnings presentations been this open or forthright about the intricacies and inner workings of these funds. So we are doing this, open up the transparency a bit in an effort to make sure all of you understand how these businesses work and how we are paid. Then after the fit description which Jim will do, Gil will take you through the two pages of financials and then finally we will break to Q&A at the end.

So let me begin with why this deal matters. And I have six bullets here I want to talk to you about. First it fulfills our 20-year objective of being the number one firm in each of our six business lines. Now I have referenced this before to you on our conference calls, but this is a very important, very serious thing to us. We set this objective back in the early 1990s. It took us 20 years to get here, but for those of us who were around then and have been working on this for two decades, this is a very important moment for CBRE.

Second, it accelerates our objective to further balance our earnings between transactional and contractual differences. I think all of you are very aware that this has been a top priority for this firm, again for many, many years. We began talking to you about this the moment we went public and we haven’t stopped talking about it since. We have been able to make serious progress in this area, both through the acquisition of the Trammell Crow Company and now the acquisition of the ING Real Estate Investment Management business.

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