ITG Investor Presentation February 2014


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ITG (NYSE:ITG) Investor Presentation

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ITG Investor Presentation February 2014

  1. 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. 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. 2
  3. 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. 3
  4. 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%. 4
  5. 5. Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 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 5
  6. 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 7
  7. 7. Subtitle Unique, Market-Leading Assets Crossing and Liquidity Execution Management Platforms • • • • 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 • • • • 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 7
  8. 8. Subtitle International Opportunities Growing Segment Europe • • International operations comprised 40% of total revenues and 65% of net income in 2013 • Asia • • • • • 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 • • • • 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 8
  9. 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 9
  10. 10. Subtitle Appendices: Research Q4 2013 Earnings Second Quarter 2012 Earnings 1/30/14 1/2012 10
  11. 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 • • • • 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 11
  12. 12. Subtitle Appendices: Liquidity Q4 2013 Earnings Second Quarter 2012 Earnings 1/30/14 1/2012 12
  13. 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 15
  14. 14. Subtitle Appendices: Platforms Q4 2013 Earnings Second Quarter 2012 Earnings 1/30/14 1/2012 14
  15. 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 15
  16. 16. Subtitle Appendices: Analytics Q4 2013 Earnings Second Quarter 2012 Earnings 1/30/14 1/2012 16
  17. 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. 17
  18. 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 18