ITG (NYSE:ITG) Investor Presentation

1. Subtitle
ITG
Investor
Overview
February 2014
February 2014
Second Quarter 2012 Earnings
© 2014 Investment Technology Group, Inc. All rights reserved
1/2012
Not to be reproduced or retransmitted without permission. #021014-28382

2. Subtitle
Insights Grounded in Data
We believe that
performance improvement
and risk management
must occur throughout the
investment process
and be grounded in fact.
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3. Subtitle
ITG is Unique
ITG removes bias, guesswork, self-interest, and piecemeal solutions from
the investing continuum. We are a multi-asset, self-directed institutional
execution and research broker, where the needs of clients come first.
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4. Subtitle
Investment Highlights
Unique Assets
International Growth
Ownership of unique, market-leading trading
assets. Expanding our platform globally to
better serve clients.
ITG has achieved product parity in its three
international operating regions (Europe,
Canada and Asia Pacific)
•POSIT® – block crossing opportunities
•Triton® – global broker-neutral execution
management
•In 2013 International comprised 40% of total
revenues and 65% of ITG net income.
•ITG TCA® – multi-asset trading cost analysis
Data-driven Research
Robust Balance Sheet
Data-driven equity research on more than
350 companies in over 20 industries.
•
Cash and equivalents of $262 million as
of December 31, 2013
Dedicated sector traders and sales
specialists in energy, consumer and TMT
sectors.
•
Only $30.3 million in long-term debt
•
Active share buyback program funded
by free cash flow: $140.8 million in
repurchases since 1Q10 have reduced
share count by more than 17%.
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Subtitle
U.S. Macro Environment: Difficult But Improving
Fund flows for U.S. active managers
2010-2013, $Billions
30.00
10.00
-10.00
-30.00
-50.00
-70.00
International Equity
U.S. Equity
Total Bond
Source: Investment Company Institute
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6. Subtitle
International Results
European Market Share Gains Driving Growth
$30,000
$26,385
Canada Revenue
$25,000
$22,663
Europe Revenue
$21,794
$20,950
$20,105
$20,000
$18,770
$18,544
$18,036
$16,854
Asia Pac Revenue
$17,575
Canada Pre-tax
$15,000
$12,793
$11,313
$10,000
$10,477
Europe Pre-tax
$11,396
$9,570
$7,670
$5,000
$2,522
$1,789
$2,576
$3,501
$3,447
$4,358
Asia Pac Pre-tax
$2,749
$4,115
$2,321
$0
-$1,793
-$5,000
4Q 12
-$405
-$865
1Q 13
2Q 13
-$256
-$652
3Q 13
4Q 13
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7. Subtitle
Unique, Market-Leading Assets
Crossing and Liquidity
Execution Management Platforms
•
•
•
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Industry leader since 1987; unique
institutional block liquidity provider
POSIT Alert® now available in 30
countries in the Americas, Europe, and
Asia Pacific
POSIT Match™ offers US block liquidity
crossing daily at 9:45 ET.
•
ITG’s Triton® is the #1 EMS in the
Greenwich US electronic trading survey
and #1 in Tabb Associates US
Institutional Equities survey
In addition to liquidity management, the
EMS is key to gaining share by
controlling orders via the trader’s desktop
Algorithmic Trading
Transaction Cost Analysis
•
•
•
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ITG Algorithms® #1 in market share by
Tabb Group and #1 in speed and price
improvement by The Trade News
Algorithmic trading available in 40
countries; Algos available for equities,
futures, and options
ITG Dynamic Open named best
algorithm by Wall Street Letter
•
•
Market leader: 52% global share
according to Greenwich Associates
Increased importance as traders turn to
analytics to save on execution costs
Offer TCA research directed at portfolio
managers, also TCA for foreign
exchange
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8. Subtitle
International Opportunities
Growing Segment
Europe
•
•
International operations comprised 40%
of total revenues and 65% of net income
in 2013
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Asia
•
•
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•
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New product offerings, secular shift
towards electronic trading
POSIT Marketplace launched in HK,
Australia, Japan, Malaysia, Indonesia
and Singapore.
Named Best Agency Broker by Asian
Investor
Move towards unbundling trading gaining
traction with TCA research and CSAs
Electronic trading 25%+ of Asia Pacific
equity trading, according to Greenwich
•
Ranked #1 among large firms polled by
Greenwich Associates in Europe for best
anonymity in a dark pool
POSIT had over 12% share of European
dark trading in 4Q 2013
Full suite of ITG products now available
in Europe; Algo trading and POSIT
access in 21 EMEA markets
Canada
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•
•
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Top 10 institutional broker by market share
Ranked #1 by Greenwich in electronic
trading, portfolio trading and algorithms
Operates MATCH NowSM broker neutral
crossing system, Canada’s largest dark pool
Leading Canadian CSA broker; ranked #1
by Greenwich
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9. Subtitle
ITG at a Glance
•
Solid balance sheet, strong cash flow
generation and active buyback
program
•
Differentiated research expands ITG’s
addressable market
•
Unique, market-leading assets for
execution and trade analysis
•
Solid international platform with
significant growth opportunities
•
Disciplined expense management
improves margins and increases
operating leverage
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10. Subtitle
Appendices:
Research
Q4 2013 Earnings
Second Quarter 2012 Earnings
1/30/14
1/2012
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11. Subtitle
ITG Investment Research
ITG Industry Investment Research
Data-driven insights on industries
and companies
ITG Economic Research
Data-driven economic notes and
macro reports
Featuring:
ITG Industry Investment Research
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•
•
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Exclusive data provider relationships
Groundbreaking, proprietary methods
for analyzing massive amounts of data
Highly skilled, quantitative research
followed by seasoned, expert analysis
Unique alpha-generating insights into
more than 350 companies in 20 sectors
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12. Subtitle
Appendices:
Liquidity
Q4 2013 Earnings
Second Quarter 2012 Earnings
1/30/14
1/2012
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13. Subtitle
Electronic Brokerage
Featuring: POSIT Alert
POSIT
Clean, global dark liquidity.
Average US Daily Volume of 63mm shares in 4Q 2013
ITG Algorithms
Sophisticated strategies for equities and futures
ITG Smart Routing
One-point high-speed connection to liquidity
ITG Net
Global FIX connectivity with trading insights
ITG Trading Services
Global expertise across asset classes
Second Quarter 2012 Earnings
• High-quality block crossing
opportunities before they reach the
market. Average trade size is 31,000 shares.
• #1 Clients’ Choice Top Five Dark
Pools, TABB US Institutional Equity
Trading Survey
• #1 for Best Anonymity in a Dark Pool,
Greenwich Associates
Featuring: ITG High Touch Trading
Services
We put your trading goals first. Our experts are
backed by alpha-generating research, industryleading platforms, and analytics.
1/2012
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14. Subtitle
Appendices:
Platforms
Q4 2013 Earnings
Second Quarter 2012 Earnings
1/30/14
1/2012
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15. Subtitle
Platforms
ITG Execution Management
Systems
Global, broker-neutral and multi-asset EMSs
ITG Order Management Systems
Global, multi-asset enterprise OMS
Featuring: Triton
• Sophisticated, broker-neutral EMS with
global connectivity, aligned to clients’ interests
and trading styles.
• Best EMS, Asian Investor, 2011, 2013
• Best EMS, Forefactor Inc. (Canada), 2011
ITG Service Modules
Solutions to improve trading transparency and
operational efficiency
Featuring: ITG Net ®
• FIX connectivity and management to more
than 650 global destinations.
• Industry-leading tools for pre-, intra-day,
and post-trade cost estimating.
• Execution transparency to evaluate trading
and broker performance against the market
and your peers
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16. Subtitle
Appendices:
Analytics
Q4 2013 Earnings
Second Quarter 2012 Earnings
1/30/14
1/2012
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17. Subtitle
Analytics
ITG Trading Analytics
Featuring: ITG TCA®
Alpha preservation throughout the trading process
• The leader in assessing trading
performance to reduce costs and
improve fund rankings. Includes competitive
comparisons through ITG Peer Analysis™.
• Named Top TCA provider by Waters and
Financial News, 2013
ITG Portfolio Analytics
Portfolio modeling, optimization, and pricing
ITG Analytics Services
Investment process consulting to improve execution
Featuring: ITG Smart Trading Analytics
Dynamic, interactive tool set to view real-time
market data, identify outliers, and forecast
long-term costs to improve performance during
a trade’s lifecycle.
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18. Subtitle
Disclaimers
•These materials are for informational purposes only, and are not intended to be used for trading or investment purposes or as an offer
to sell or the solicitation of an offer to buy any security or financial product. The information contained herein has been taken from
trade and statistical services and other sources we deem reliable but we do not represent that such information is accurate or
complete and it should not be relied upon as such. No guarantee or warranty is made as to the reasonableness of the assumptions or
the accuracy of the models or market data used by ITG or the actual results that may be achieved. These materials do not provide
any form of advice (investment, tax or legal). ITG Inc. is not a registered investment adviser and does not provide investment advice
or recommendations to buy or sell securities, to hire any investment adviser or to pursue any investment or trading strategy. All
functionality described herein is subject to change without notice.
•Broker-dealer products and services are offered by: in the U.S., ITG Inc., member FINRA, SIPC; in Canada, ITG Canada Corp.,
member Canadian Investor Protection Fund (“CIPF”) and Investment Industry Regulatory Organization of Canada (“IIROC”); in
Europe, Investment Technology Group Limited, registered in Ireland No. 283940 (“ITGL”) and/or Investment Technology Group
Europe Limited, registered in Ireland No. 283939 (“ITGEL”) (the registered office of ITGL and ITGEL is First Floor, Block A, Georges
Quay, Dublin 2, Ireland and ITGL is a member of the London Stock Exchange, Euronext and Deutsche Börse). ITGL and ITGEL are
authorised and regulated by the Central Bank of Ireland; in Asia, ITG Hong Kong Limited (SFC License No. AHD810), ITG Singapore
Pte Limited (CMS Licence No. 100138-1), and ITG Australia Limited (AFS License No. 219582). All of the above entities are
subsidiaries of Investment Technology Group, Inc. MATCH NowSM is a product offering of TriAct Canada Marketplace LP (“TriAct”),
member CIPF and IIROC. TriAct is a wholly owned subsidiary of ITG Canada Corp.
Disclaimers
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