Good morning, ladies and gentlemen, and thank you for joining the Cowen Group, Inc. conference call to discuss the financial results for the 2011 first quarter. By now, you should have received a copy of the company's earnings release, which can be accessed in the Cowen's company incorporated website at www.cowen.com. If you do not have Internet access and would like a copy of the press release, please call Cowen's Incorporated Investor Relations at (646) 562-1880. Before we begin, the company has asked me to remind you that some of the comments made on today’s call and some of the responses to your questions may contain forward-looking statements. These statements are subject to risks and uncertainties described in the company’s earning release and other filings with the SEC. Cowen Group, Inc., have no obligations to update the information presented on the call. A more complete description of these, and other risks and uncertainties and assumptions is included in the company’s filing with the SEC, which are available on the company’s website and on the SEC website at www.sec.gov. Also on today’s call, our speakers will reference certain non-GAAP financial measures, which the company believe will provide useful information for investors. Reconciliation of those measures to GAAP is consists of the company’s reconciliation as presented in today’s earning release. Now I would like to turn the call over to Mr. Peter Cohen, Chairman and Chief Executive Officer. Please proceed.

Thank you, operator. Good morning, everyone, and welcome to Cowen Group's 2011 First Quarter Earnings Call. I'm joined here today by Jeff Solomon, our COO in Investment Banking; along with Stephen Lasota, our Chief Financial Officer; and Pete Poillon, Head of Investor Relations and Corporate Communications. Later on the call, Jeff will take you through our individual operating businesses in detail, followed by Steve, who'll discuss our first quarter results. I'm pleased to report we recorded our second consecutive quarter of positive economic income as we generated $7.2 million of earnings during the quarter, which compares to an economic loss of $11.1 million in the prior year period. Later in the call, Steve will provide greater detail around the drivers of the improvement and economic income, and as many of you have probably already seen, we've issued our press release with more details on the earnings. As we've discussed in detail during the past calls, 2010 was the year of a positive change for the company. And we're building on the momentum we gained at the end of 2010 to drive results into this year and beyond. Last year we identified a number of important initiatives across the firm, and we're beginning to demonstrate our ability to successfully execute on those initiatives. The firm has been able to generate positive momentum over the last 6 months, as the transition of old Cowen to new Cowen has accelerated. And Ramius we’re pleased to report that assets under management increased for the fifth consecutive quarter, and we'll supply some of those details later on also. We're positioning alternatives platform that continue to gain traction with areas of growing investment demand. We've launched new funds and products focused on replication and commodity trading. And for our established products, we're beginning to see their…

Thank you, Peter. First, as Peter mentioned, our operating businesses are beginning to gain momentum. I'd be remiss if I didn't start off by thanking the folks who are making it happen every day in both businesses. We've taken the time to hire and retain the right people and it is showing up in results, and that's very exciting to all of us. I'll begin by discussing some of the recent developments at Ramius, our Alternative Investment Management group. As compared to the start of the year, we recorded an increase in assets of approximately 8% or almost $700 million. This increase was largely driven by net cash inflows into our cash management and alternative solutions platforms. It is an impressive quarterly increase, but it should be noted that both of these platforms generate lower fee revenues than our more traditional hedge fund strategy. As a result, our average annualized management fee decreased to 61 basis points during the quarter as compared to our average management fee of 65 basis points in the prior year period. While it's not yet reflected in our numbers, we believe we are making considerable progress in attracting new assets to some of our higher-fee paying funds, as Peter mentioned earlier. Once these mandates are funded, we expect that our average fees will begin to increase over the course of the year. Aside from cash management and alternative solutions, the global credit and deep value strategies also grew assets, but at a more modest pace. We also reported positive incentive fees for the third quarter. During the first quarter, we earned incentive fees of $5.2 million as compared to $2 million from the prior year period. The increase in incentive income was a result of our strong performance, combined with the fact that all of…

Thank you, Jeff. During the first quarter of 2011, we reported GAAP net income of $82,000 or less than $0.01 per share, compared to a GAAP loss of $13 million or $0.18 per share in the first quarter of 2010. In addition to our GAAP results, management utilizes economic income to analyze our performance. We believe economic income provides a more complete view of the business by excluding such items as the impact of consolidating our funds and expenses associated with onetime equity awards made in connection with the November 2009 Ramius-Cowen transaction. Economic income in 2011 also excludes $2.8 million in acquisition-related expenses, such as legal, consulting and banking fees, associated with the proposed acquisition of LaBranche and other reorganization charges within the Alternative Investment Management business. For the 3 months ended March 31, 2011, the company reported economic income of $7 million or $0.09 per share, compared to an economic loss of $11.1 million or $0.15 per share in the prior year period. If we adjust economic income to exclude certain non-cash items, including depreciation and amortization, share-based and other non-cash deferred compensation expense and our real estate incentive fee gain or loss, economic income for the first quarter of 2011 was $12.3 million, compared to an economic loss of $6.5 million in the first quarter of 2010. Our aggregate first quarter economic income revenues increased by 29% to $79.7 million from the prior year period, primarily due to increased investment banking fees, investment income and incentive income. I'll spend a little time discussing each of the economic income revenue line items. Investment banking revenues were $14.7 million during the quarter, more than double first quarter 2010 banking revenues of $6 million. The increase in fees was principally driven by our equity underwriting product, which generated $11.3 million…

Thanks, Steve. Well, I think everyone probably gets the picture that a lot of what we talked about last year, the programs we implemented, the reduction and recasting of our overhead into more productive areas is beginning to pay off. We're all in this industry, somewhat environment-bound, but the environment definitely has gotten better, and let's hope it stays that way. But let's turn this over to questions now, and see if any of you have things I can enlighten you about or enhance, sort of what we just said.

[Operator Instructions] Your first question comes from the line of Ted Holzman from Sandler O'Neill.

You did a good job with the comp ratio in the quarter, is this a function of the revenue mix? Or how sustainable is the lower rate going forward?

It's a combination of the revenue mix and the growth in denominator. And that we did a pretty effective job at reducing headcount last year, so that people here on a per capita basis are more productive. So it's no one thing, it's a combination of things. And look it will fluctuate based on the mix of revenue.

And Ted, we do expect that we may hire some people that -- the revenue generation may take a little bit. So the comp-to-rev ratio may increase but not much.

Let me just reiterate. Last year, we had about $18 million of comp expenses that went through the P&L, relating to the salaries of people who are no longer here, severance payments and stock-based comp write-offs of people who left. At the same time, we had about $7 million of expenses last year in the comp line relating to people we brought in, over really kind of the second half of the year. So we didn't really see the productivity of those people in the revenue numbers. So there’s $25 million of expense last year that relates to retooling this place.

Okay, great. And then on the investment management side, you noted that your pipeline is strong, but can you quantify that in any way? And then, when you think about that backlog, how much is the market conditions versus what will probably get done regardless?

So I don't think we actually quantify numbers in our backlog. So I can't really give you specifics. What I can say is that the amount of equity underwritings in PIPEs has increased, and in the mandated backlog -- and what I would say is the activity around some of the areas that we focus on has increased significantly. We've done a couple of transactions. I would certainly -- I'd point you to the ones that have been announced in April to give you a sense of the kind of activity. I think on the last call we talked about the lead managed deal we did for our company called Selectus [ph] in March, there's been a spillover effect on that. It was a great execution on behalf of our team, and what we're seeing is reverse inquiry and a lot of referrals that are coming off the back of that success. And you can see it showed through by just the amount of inbound calling. So it's been healthy, is all I can say. It's definitely market-dependent. I think if we go through a protracted period here of a down-trending market or we have anything that increases volatility significantly, that could be impacted. But what I would say is the companies that we're focused on primarily, they need to do financing. And so these are things that will invariably happen. If they happen next quarter or the quarter after next, we're focused on companies that need to get stuff done, irrespective of market conditions.

Okay. And then it sounds like the asset gatherings for the value and opportunity fund is going well. But when you said the economic impact is modest, is that assuming that you gather more assets, or is that on the current assets that you have now?

It's fairly modest on the current assets we have now. And if we grow the funds to where we think we can, the economics, while not as big as they would have been -- but again we wouldn't have grown to the size we expect to get to because of this perceived conflict, dwarf our current economics, in terms of absolute numbers.

Okay. And then my final question. It looks like the RTS Global 3X Fund was down a bit in the quarter, is there anything that you can attribute to that

Volatility in the commodity market.

Your next question comes from the line of Joel Jeffrey from KBW. Joel Jeffrey - Keefe, Bruyette, & Woods, Inc.: I think, Peter you said in some of your opening comments, that you still think there's room for future cost savings on the non-comp side. Can you give us some sense from where you think those costs could come from and a sense for how big they could be?

Well, it's hard for me to sort of guess how big they can be, because as we grow the business, and as Steve pointed out, we're going to be selectively continuing to hire people. And then those people will require support. But as an example, we think that integrating the LaBranche technology is going to help us lower execution costs. We still log some expenses in marketing related to the wind down of our multi-strategy fund in client service. So we're not nearly as efficient there as we could be. So at this point, this small amount spread all over the place. So I wouldn't expect really significant decline. I can't even say we have any excess space at this point, because having consolidated everybody from 1221 6th Avenue on the production side of Cowen over to 591 Lex [Lexington Avenue], we're actually -- we're packed like sardines now. We're actually kind of running out of space. So while we still have some legacy space over at 1221 6th Avenue, which goes to 2013, whatever we save there, we're going to be spending as we take -- we're going to have to take space to accommodate the growth that's going on.

And that we are in the process of doing a data center conversion. A lot of those expense reductions will come through in future quarters.

Right now, it's just really more about revenue driving and deployment of capital. I would say than it is about the major gains from expense reductions. Joel Jeffrey - Keefe, Bruyette, & Woods, Inc.: Okay, great. And then actually that's a nice segue into my next question. I mean clearly, equity volumes are weaker this year than they have been last year. And it sounds like you guys are expecting them to continue to be relatively subdued going forward. Are you guiding anything specifically to your clients as to why they're either staying out of the market or are they switching to different products? Any commentary there?

I think, sure, we hear things from our clients. I think one of the things they're saying is they value our research. But they're also saying that their wallets are smaller than they used to be. I think that's a function of the fact that there's just not as much trading going on. I think you can follow fund flows and have a sense as to what's happening. It's still -- actually we think a fairly significant amount of cash, believe it or not, that is on the sidelines and missed this rally over the last 15 months in equity in particular. But one of the things we're absolutely seeing is the share of all this going to electronic trading. And there are a number of our clients who just don't do as much in cash equities as they used to, because it's far more efficient for them to trade electronically. These are direct market access algorithms and things like that. And what you're seeing us do is develop capability there to really go after that share of the wallet, that currently we don't address much of. And so that's our answer to that. The other one is, if we think that the growth in listed derivatives is still evident, there are a number of accounts that are beginning to use or growing in EPS in listed options as the way either to hedge their portfolios if they're hedge funds or as a way to gain market share if they're larger institutional accounts. And so what you're seeing us do is build up our capabilities in those areas to address the bigger share of the wallet. Joel Jeffrey - Keefe, Bruyette, & Woods, Inc.: Okay, great. And then just lastly, can you just remind us again how much excess capital you expect to get from after the LaBranche deal closes?

Well, I don't think we have ever said that we expect to quantify a number of excess capital. LaBranche's network there is a certain amount is going to be needed to support the ongoing businesses. It's not terribly significant relative to the overall capital base of LaBranche. And we expect the balance of the capital to over time gets deployed and levered across our asset management strategies. And then basically perceive new asset management strategies and to take advantage of the opportunities that we come across as we're managing fiduciary money, which is what we have done our entire history. But we'd never actually try to quantify what the excess capital would be.

If I could just say, as Peter mentioned, the amount of capital required to support the existing business is there. We have a pretty good handle on that. The vast preponderance of it will be available for us to invest.

[Operator Instructions] Your next question comes from the line of Logan Sugarman from Midsummer Capital.

Economic results look a lot better than the headline numbers. I was just wondering if you guys could go through the major differences between the economic revenues and returns versus the sort of headline GAAP numbers? Just to kind of clarify for the stream. I know you just went through them, but I think maybe the down the line results getting missed potentially.

Right. Steve, why don't you -- it's just a handful of...

Yes. The best place to look in the press release is when we do our reconciliation from GAAP to economic income. But just quickly, we talked about the transaction-related expenses. So they're expense to GAAP, we don't include those on our economic income. We have equity awarded, the onetime transaction as a result of the Cowen-Ramius 2009 transaction is $3.9 million. So it's mostly that those 2 numbers, $2.8 million for our reward expenses and the $3.9 million for the onetime transaction cost.

Okay, great.

One of the things that we don't highlight it, I don't think enough, but it's a metric I look at is when you take economic income and non-cash charges, what our cash generation in the quarter was, which is about $12 million, it's actually higher -- it's way higher than $12 million. It's probably in the low-20s millions of dollars, because we obviously have bonus accruals going through our income statement that won't get paid out until next February. So we have the potential now to really generate a significant amount of cash and a number well in excess of what we might have to pay out, cash portion of bonuses next year. So the way I look at it, I'm very pleased with our numbers.

Your next question comes from the line of Christina Findler [ph], private investor.

You mentioned briefly the withdrawals of UniCredit. Is this withdrawal is now complete to date or do they still hold management within one of the funds?

I didn't understand it, could you repeat the question?

Sorry, you mentioned the withdrawals of UniCredit, are these withdrawals now completed or do -- or does UniCredit still have assets under management?

Yes, they still have -- we still have some assets with us that we will be returning to them over the next year or so. It's roughly on the hedge fund side. It's roughly $150 million, and on the fund-to-fund side or alternative solutions side, it's about $40 million.

Okay.

The amount of assets left in the distributive back from legacy business is relatively small at this point. [Audio Gap]

Our operating flows will far outweigh those withdrawals as we continue to liquefy and send out money.

At this time I'm showing no further questions. I'll now like to turn the call back over to management for closing remarks.

Well, thank you all very much for participating. What I can tell you is we are very upbeat, as we look at how we are positioned today and compare ourselves to our peers in the industry. And that's kind of a broad range of different types of companies. We see ourselves in an incredibly strong position. We think we have more tangible hard book value than anybody else in the industry per employee. Per employee is an important metric. We're the least leveraged firm in this industry or at least on a par with 1 or 2 other firms who have de minimis leverage. There are opportunity to deploy capital, post-LaBranche even as we are today, but certainly post-LaBranche and grow certain parts of the business is significant. Obviously challenging in this environment. But we made a lot of progress, and we are just -- we're feeling pretty good about where we're going. So with that, I thank you all. I wish everyone a happy weekend, a great weekend. Happy Mother's Day, and we'll be speaking to you in 3 months.

Ladies and gentlemen, thank you for your participation in today's conference call. You may now disconnect. Have a wonderful day.