Good morning, ladies and gentlemen, and thank you for joining the Cowen Group, Incorporated conference call to discuss the financial results for the 2010 fourth quarter and full year. By now, you should have received a copy of the company’s earnings release, which can be accessed at the Cowen Group, 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 Group, 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 the risks and uncertainties described in the company’s earnings release and their other filings with the SEC. Cowen Group, Incorporated has no obligation 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 filings 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 believes will provide useful information for investors. Reconciliation of those measures to GAAP is consistent with the company’s reconciliation as presented in today’s earnings release. Now, I would like to turn the call over to Mr. Peter Cohen, Chairman and Chief Executive Officer.

Thank you, operator. Good morning, everyone. Thanks for tuning in to our earnings call. I'm joined here today by Jeff Solomon, our Chief Operating Officer and Head of our Investment Banking unit; and Steve Lasota, our Chief Financial Officer. Later in the call, Jeff will discuss our individual operating businesses in detail, followed by Steve, who will take you through the financials for the fourth quarter and the full year. 2010 was a year of positive change and a lot of progress for Cowen. Through the last three quarters, we have discussed a number of initiatives within the Asset Management business and the broker-dealer to build the foundation for diversified growth-oriented financial institution and drive us to profitability. We're pleased to announce that in the fourth quarter we recorded our first profitable quarter as a combined company with GAAP net income of approximately $4 million or an economic income basis, a gain of approximately $6 million. But first, I would like to thank all of the people of our organization for helping achieve this important milestone. As a group, we have come together and focused on being productive partners, seizing opportunities, managing costs and contributing to the performance of this organization across the board. More than ever, we have become a solutions-driven and intensely-focused organization, really pointed towards delivering the products and services that our clients are demanding both in the Asset Management business, as well as in Investment Banking, Research, Sales and Trading. To touch on some of the highlights, at Ramius, our Alternative Asset Management business, the fourth quarter was a continuation of the year-long combination of strong performance and a positive trajectory and asset growth across the platform. Fourth quarter assets under management rose $815 million to $9 billion, as of January 1, 2011. This is a…

Thank you, Peter. Before I get started, obviously, I'd like to echo Peter's sentiments about the efforts that our team put forth across the board. It's really been an incredible year, and we've done a lot, in a lot of different ways, to build out a very solid platform in which to deliver consistent performance. And we feel very proud of everybody here who's really stepped up to the plate. I'll begin by discussing various developments that took place at Ramius during the fourth quarter and the year, followed by a brief discussion of Cowen & Co., our broker-dealer, and then I'll talk a little bit more in detail about our balance sheet activities. As Peter mentioned, Ramius had a strong year with consistent quarter-over-quarter growth in assets under management. We launched a number of new products and one mandate from prominent institutions while facing some incredibly strong competition. To their credit, our team stayed close to clients, shifted their approach to meet new demands and priorities, took advantage of market opportunities and delivered solid performance across the board. In detail, our total assets under management for the fourth consecutive quarter increased, rising to just over $9 billion as of January 1, 2011, as compared with $8.2 billion at the beginning of October. The increase resulted from net subscriptions of $780 million during the quarter and performance-related appreciation in assets of $40 million. The subscription-related increase was also primarily driven by our cash management and by certain of our private investment products. Our assets under management and our ongoing hedge fund products increased by $91 million in the fourth quarter, excluding $152 million in assets returned to investors in conjunction with the closing of our multi-strategy funds. $23 million of that $152 million was transferred to other hedge fund products.…

Thank you, Jeff. Good morning, everyone. Beginning with GAAP numbers, please remember when reviewing the earnings release or the 10-K, which we expect to file next week, and as a result of the Cowen Ramius merger which closed in November of 2009, the 2009 GAAP fourth quarter results reflect three months of legacy Ramius results and two months of legacy Cowen results. Furthermore, GAAP results for the full year ended December 31, 2009, include 12 months of legacy Ramius results and two months of legacy Cowen results. All 2010 results reflect performance of the combined business. For the three months ended December 31, 2010, we reported GAAP income of $4.1 million or $0.06 a share compared to a loss of $23.4 million in 2009 or $0.46 a share. For the 12-month period, we reported a GAAP loss of $45.4 million or $0.62 a share, compared to a loss of $55.3 million in 2009 or $1.35 a share. Management utilizes economic income when analyzing our business performance, as we believe that economic income provides a more complete view of how we generate revenue and where we incur expenses. More specifically, economic income excludes the impact of consolidating any of our fund's expenses associated with one-time equity awards made in connection with the Cowen Ramius transaction, which totaled $2.1 million for the fourth quarter of 2010, $9 million for 2010 full year and $3.4 million for the fourth quarter and full year of 2009 and in the 2009 periods, transaction-related expenses of $10.5 million for the three months and $19.2 million for the year. In addition, economic income revenues include the investment income that represents the income the company has earned in investing its own capital, including realized and unrealized gains and losses, interest and dividends, net of associated investment-related expenses. For…

Thanks, Steve. Thank you very much, Jeff. So at this point, ladies and gentlemen, we'll open it up to any questions that you may have.

[Operator Instructions] And our first question is from the line of Devin Ryan from Sandler O'Neill. Devin Ryan - Sandler O'Neill + Partners, L.P.: Starting on the Alternatives business, so net inflows were, obviously, very strong in the quarter but I was a bit surprised that the performance-related appreciation in AUM was only roughly $40 million just given it was really strong performance in your funds. So I'm not sure if I'm just reading something wrong there but I want to understand that.

No, that's correct. I mean the funds that are having the really strong performance just aren't that big yet. Though with respect to credit and what we do in the V&O, fund those strong results are reflected in the investment income part of the firm's revenue because one of the things that we have done always is put our capital side-by-side with our fiduciary money. So while the funds on that as big as they're going to be -- and in fact today, there's more money invested in those strategies from the standpoint of the firm's capital. So part of the results you see are kind of an alignment of the growth in assets but the assets are buried in our balance sheet. Devin Ryan - Sandler O'Neill + Partners, L.P.: And then, I appreciate the detail on the spin-off and the value in opportunity business in there, and I guess I understand the rationale there. But in terms of the impact on result, I mean, is there going to be anything material in terms of how it impacts Cowen? And how are you guys going to report that when you do spin it off? Is it going to flow in like an equity interest or is it going to flow into management fees?

Well, I'll deal with the impact and on the reporting on earnings, and I'll let Steve talk about how we're going to report it from a consolidation point of view. But in essence, we don't think it has any material impact on the income -- revenue and income of the firm, based on how it's structured.

And from a GAAP perspective, Devin, we still haven't run the analysis to determine whether it would be consolidated or treat it as an equity method of accounting. But either way, as Peter said, it won't change the results much. Devin Ryan - Sandler O'Neill + Partners, L.P.: In investment banking, I again appreciate the detail on the backlog and obviously looks very strong there. On the advisory side, of those 18 deals you said, are there any sizable deals in that backlog? And then just generally for advisory and underwriting, have deals been getting completed on the original time line, recently. I know the markets have been a bit choppy and just how are bankers feeling today about the likelihood of deals in the backlog pricing or closing on time or on the original time line?

Let me answer that. Good question. First, I think on the advisory side, yesterday, we announced the Global Tech transaction, which is a huge win for us organizationally. It's public so I can talk about it. It’s obviously a significant merger advisory fee for us. It's also a company that we took public as a book runner in November of '09, and the investors we put in that name probably received about an 86% rate of return from November of '09 until the time the business was sold. It reflects the strength of our Aerospace Defense business and the presence that we have in research, as well as banking. So that was a transaction that was probably listed in the backlog here that was signed yesterday. Now whether that shows up in first quarter earnings or not, it just depends on when it closes. But we feel very comfortable that, that it is going to close and that we will do well there. The rest of the backlog -- I mean, things are closing. We're not seeing buyers walk away or delays. It's typical stuff. We're running auction processes. Sometimes it takes a little bit longer than you'd like but we're not seeing things. We're not seeing anybody walking away from transactions after they've agreed to them. As far as the IPO market, it's really industry selective. I would say we're certainly seeing new issue of healthcare IPOs, particularly life sciences IPOs has been a choppy market. There've been a number of transactions that have actually been pulled or have come at significant discounts to their initial filing range. And I think that's something that we are dealing with. But I would say to you, as we think about our backlog and we think about the probability waiting in the…

This is Peter. Let me go to the last question first, the comp. We still think that comp to revenue is too high. Our goal is to push that down into the 50s. To a certain extent, it'll be -- the mix of revenue will affect what the comp-to-revenue ratio is because the better we do on the investment side, the lower the comp to revenue is going to be. And that's maybe less predictable than other revenues in the firm. With respect to expenses, I think non-comp fixed expenses are going to continue to go down. Some of that savings is going get reinvested in comp, as we bring on new people and new businesses over the next, I don't know, few weeks, months we will be talking about or announcing some new business activities and the joining of the firm, people in some new areas and joining of the firm or people in some of the existing areas that we are in the process of strengthening and/or building. So I think the sense that I can give you is that expenses, overall, hopefully, remain flattish. While in fact, I hope comp goes up because revenue goes up, and I hope non-comp comes down. And I think that's what you can look forward to seeing. But I think the comp-to-revenue ratio overall goes down in the middle of all that.

Your next question is from the line of Errol Rudman from Rudman Capital.

Can you share with us the rationale for the spin-off? And can you share with us how much the managers are contributing to the new entity, and what will the ratios be?

We really can't. The rationale, I can. And kind of the details since they're a private group, and we have confidentiality agreement with them as to what we'll divulge about their end of it or not. It's something that we're going to live with. But the rationale is really quite simple, and it's quite compelling, actually. It is an area, an investment area that has a certain degree of controversy attached to it. And it's an area that it's highly intense. And we found in marketing the product that a number of very substantial and institutional investors who wanted to invest with us were worried about this group sort of being under the umbrella of a broker-dealer or inside and the conflicts that might arise from it. And we have a fair degree of comfort that by giving them, basically, everything they already had but in a separate entity outside of the firm, meaning the independence to make their investment decisions and to pursue their opportunities, that the assets that will come to V&O are substantially enhanced. I mean, it's not speculation or conjecture, I mean a very specific, very sizable institutional mandates that we believe will now come to the fund that were in separate accounts that would not have under the current umbrella. And frankly, on the flip side of it, on the investment banking world, a number of clients I think had some reservations about that activity inside an investment bank that was seeking to obtain mandates and do business with a wide variety of tech companies, biotech companies, healthcare companies, et cetera. And so over the year, we learned that from both sides, the investment side and the investment banking side, all of our needs and goals were probably best met by spinning this group out.

It's a very complete and excellent description. Could you also help us to understand why you're only getting a minority interest in the spin-out as opposed to owning 100%, and why you can't disclose now what the terms are and when you can disclose it? I noticed that it was your best performing fund in the last couple of years.

Right, it was. And it's actually been the best single performing asset class in the firm for a long while. But the amount of outside money we had in that fund was actually, directly, was very small because as we were running multi-strategy portfolio, the big allocation came from multi-strategy down. So as we've been exiting that business, that the amount that we've contributed to the fund has shrunk considerably. The economics to the firm don't change materially. If we own the 100%, we would not accomplish the objective of the degree of independence that these institutional investors want and that potential banking clients would hope to see because of all the compliance-related complications of being 100% owner. So this was a very clean way of getting this multiple objective structured in a way that our economics are not impaired. I feel comfortable in saying that if we grow the asset base to where we believe it's going grow, our economics are actually going to improve substantially because this will be a much bigger asset class for us than it could have been stuck under the -- inside the firm with the investment banking activities of the firm.

And when will the details be made available, the terms of the spin-off and so on?

Well, I guess, to the extent, we're obligated to -- when we're filing requirements, it will be spelled out when will be filed our Q or 8-K.

If I understand your innuendo correctly, there'll be no shares available to spin-out but -- or the spin-off but there will be no shares available for public shareholders?

No. This is just -- the management of this group has formed a private entity, they're own entity to own their shares with us as a public company as their partner..

Your next question is from the line of Robert Louis [ph] from Chemco[ph] .

My questions are very similar to questions of Errol. It seems like a pretty big loss FIR Cowen. The Starboard Group was an exceptional performer and one of the biggest risks of having that group within Cowen is that they could leave and assets walk out your door at night they say in this business, and it seems to apply here. I presume that this is the better of two alternatives. The worst alternative would have been that Smith and his partners would've just gone out on their own and formed a new company called Starboard or whatever and run the company on their own and Ramius would have had no involvement. Is that a pretty fair depiction?

Sure. I mean that's true of any really good performing group inside any investment management company. They always have that ability. In fact, not that, that was the focus of what we were doing but we've de-risked that aspect of it considerably through this agreement because this is a long-term partnership agreement. And also, the firm's ability to access a strategy with its capital has not changed at all either. So this is kind of the best of all worlds. We de-risked that possibility. We've eliminated conflicts that affect the ability of the asset base to grow very substantially. And I think over the next three months, four months, as we have the opportunity to announce some of those mandates, you'll understand just why this was the right thing to do.

I also want to add we continue to market the fund, and that's a really important thing. One of the great opportunities for us is that we remain partners but not just economic partners, but functional operating partners. And our ability to distribute the funds to the distribution networks that we've been working so hard to develop those direct institutional, as well as the financial intermediary market, remains our primary objective. And so this is something that we can feel very comfortable going out and talking about because obviously we've been partners with these guys for a long time, and we have a tremendous amount of faith in their ability. And so the fact that we continue to be as engaged as we are on the distribution and sales effort, I think reflects the fact that this is not just a financial partnership but an operating partnership, and that's a very strong think to say. So the independence that they have is very significant. I don't want to understate that. They are running the portfolios, and that's a very important thing to understand but the marketing and distribution remains largely intact.

But it's not really the best of all worlds. In a perfect world, they would have grown within the Ramius/Cowen umbrella and you would have collected all the incentive and management fees less compensation directly to the Cowen shareholders. So this is sort of the best of two bad alternatives with them leaving, correct?

No, we don't agree with that all.

If you look at the map and say in the fourth quarter 2010 had this group been Starboard standalone with a small minority interest held by Cowen/Ramius, I presume that would have been dilutive.

No, not a material effect on our results. I mean without sort of going trying to do the math over the phone here, if you assume that the assets triple in size because conflict has been eliminated and do the math versus kind of slogging along growing more modestly, the math becomes extraordinarily compelling.

I understand that the perspective and I can see how that could be the case but I meant just looking back on a fourth quarter basis. I see your point and I hope your projections are correct.

[Operator Instructions] Our next question is from the line of Aaron Cadell [ph] from Hovde Capital

First going back, I'm unfamiliar with Global Tech and you kind of made a comment about the sale of that company and a possible M&A fee as well as an investment that the company has in that. Could you just describe that in a little more detail? I just have never heard of that.

It's not an investment we have. Global Defense Technology is a company that we took public. We have a lot of our institutional investors in that name. Obviously, a lot of relationships that we have, both with the company and both with the institutional investors and their names, so Global Defense Technology is not a name where we have an investment. But obviously, we've got a great relationship on the banking side and on the sales and trading side.

And so it’s just an M&A deal that was announced recently where you were the adviser, sort of.

We were the adviser. But we're also the people to take the company public. So it's a wonderful thing to be able to take a company public and continue to provide advice. And ultimately when they decide they want to pursue strategic alternatives, you get that phone call and you execute as well as we did. That's a great thing to be able to do.

And then for Peter, just want to get your thought on stock buyback as it relates to other potential uses of your capital, I guess both kind of now and pro forma for LaBranche. I mean your stock’s trading meaningfully below tangible book value. That tangible book value would presumably increase even with LaBranche. I would assume you would have some negative goodwill as part of that acquisition. So at 75% of tangible book and with whatever your cash is now and then you get another $90-plus million in cash from LaBranche. The economics for that are pretty compelling. How do you match that up relative to investing more on your funds or other proprietary investments or other potential acquisitions after LaBranche?

I think once the transaction is -- nothing is going to happen between now and getting the transaction done. Once the transaction is done, then the sweep of opportunities open to us expands very dramatically. One of them, obviously, if the stock doesn't sort of want to recognize what we're doing, that opportunity always exists to accrete book value by buying stock back in the marketplace, if that happens to be the case. And we're still the client. But in addition to the technology platform that LaBranche brings to us, the Hong Kong broker-dealer, which we think potentially very important long term and when Jeff went through what happened -- in banking a number of transactions that we are generating in China, without the ability to operate Hong Kong solution for many of these companies is greatly enhanced by having that. By taking their ETF and FX businesses onto our institutional platform and integrating our sales effort through those businesses, I think the revenue opportunities and the associated trading opportunities are enhanced very substantially. The additional capital allows us to look at broadening the sweep of businesses in the Asset Management business that we might want to explore, go into. And specifically with respect to being able to align our capital with investors' interest, which is something we've always done. And whenever we do that we know with a successful record it helps us raise assets faster than otherwise because people take a high degree of comfort from the fact that our capital is side-by-side with them. So I mean, what LaBranche does is, I think, it multiplies the opportunities for us as a firm. This is more than one plus whatever LaBranche is equals some new number. I think it's more than one plus LaBranche equals a different number. We're kind of very excited about getting that technology in here and being able to sort of expand our horizons more rapidly than we would have in our current state.

And then just lastly, just in terms of timing you've mentioned the filing of a proxy and filing of a K. Are we talking next couple of weeks on that or next few months?

No, it will be the next couple of weeks.

The K will be next week, and then the proxy will be a week or two following that. That's the goal at this point

Your next question is from the line of Robert Louis [ph] from Chemco[ph] .

What is a decent description, if you could, Peter, of maybe your next snap-on, bolt-on acquisition target? Is it a broker-dealer in a diversified geography, away from where you are now, mostly in New York? Is it something in Asia? What would you like to see once LaBranche becomes part of Cowen?

First, we have always been and we will be opportunistic in terms of when opportunities present themselves. I can say generally, with comfort that, if we make acquisitions, they're going to have to have certain characteristics. One of them is we're going to want recurring revenue income businesses. So you can let your imagination take you wherever you want but things that produce constant fee income or where there are asset rich and have portfolio income where we can apply our investment talents to a portfolio. Two, over the years and -- unfortunately, you don't have the benefit of the Ramius history, although it was in the proxy at the time of the merger, but going back many, many years, we've been very successful in our merchant banking activities. So we would hope that having this additional capital when those opportunities present themselves, we'll be able to take advantage of them. Beyond that, we're looking for opportunities that are recurring asset rich and not overhead rich or people-rich types of ways to expand the business. The capital has a benefit of working at nights, Saturdays and Sundays. It doesn't require severance when you terminate it. It doesn't require benefits. Capital has a lot of advantages. And very concentrated group of very good people and a lot of capital and I think that over time we'll do very well.

But what do you feel about an entity that has a bank as its component? Let's say a target company that had a bank along the lines the way Morgan and Goldman Sachs during the crisis so wanted to have some kind of a bank component. Is that something you see as an advantage as well?

Well, no. I don't think that's something we are interested in, highly regulated, highly constrained businesses. And look, Morgan and Goldman, if they had their d’ruthers they wouldn't be banks. It was the price they have to pay to save themselves. And now they've checked into the Hotel California and they’re not checking out because the deal with the Fed was once you take this license, you're in. And the only way you get out -- the only way any bank gets to give up its federal charter is if the government says you can give it up. You just can't voluntarily hand it in one day and say, "See you". And if you look at what's been going on and the need to wind down their proprietary trading activities, there are a lot of constraints that we really don't have any interest in exposing ourselves to.

And at this time, there are no other questions in the queue. I'd turn the call back over to the management team for closing remarks.

Well, operator, thank you. And all I can to say, ladies and gentlemen, is thank you for having the interest in us. And for those who asked questions, asking questions. We'll be speaking to you in a few months when the first quarter is done. And I expect we're going to continue to make progress pursuing our objectives that we outlined all of last year and kind of reinforced again just now. So with that, everyone have a nice weekend, a nice day.

Ladies and gentlemen, thank you, all, for your participation in today's conference call. This concludes the presentation, and you may now disconnect.