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Itg investor presentation_05aug14


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Itg investor presentation_05aug14

  1. 1. SubtitleSubtitle Second Quarter 2012 Earnings 1/2012 ITG Investor Overview August 2014 Fnam Title Entity Name (only if required, otherwise delete) Arial size 11 © 2014 Investment Technology Group, Inc. All rights reserved . Not to be reproduced or retransmitted without permission. 080514-28334
  2. 2. SubtitleSubtitle Investment Highlights 2 International Growth • ITG has achieved product parity with the U.S. in its three international operating regions (Europe, Canada and Asia Pacific) • In 1H14 International comprised 45% of total revenues and more than two thirds of total pre-tax income. Robust Balance Sheet Competitive Platform Strong Operating Leverage • Operating model and disciplined expense management provide attractive opportunities for increased profitability • Pre-tax margins on incremental revenue range from approximately 40% to 50% depending on operating region • Unique, market-leading trading, analytical and research assets. Technology can be applied to new asset classes (FX, Fixed Income) and to improve market share in underpenetrated hedge fund segment • ITG consistently ranks near the top of industry analyst surveys (Greenwich, Tabb, Aite) for products and client service • Cash and equivalents of $239 million as of June 30, 2014 • Only $24 million in long-term debt • Active share buyback program funded by free cash flow: $168 million in repurchases since 1Q10 have reduced share count by more than 20%
  3. 3. SubtitleSubtitle Global Product Groups 3 Electronic Brokerage 53% Research, Sales & Trading 20% Platforms 18% Analytics 9% 2013 Revenues by Product Group Analytics Platforms Electronic Brokerage Research, Sales & Trading POSIT ® dark crossing in 33 countries ITG Algorithms® in 40 countries ITG Smart Routing Data-driven research in consumer, TMT and energy sectors. High touch and portfolio trading. ITG Triton ® broker-neutral execution management ITG OMS ® and ITG Position Manager ITG Net ® FIX connectivity to 650+ destinations ITG TCA® is the global market leader Available for equities and foreign exchange Pre-trade, real-time and post-trade analytics
  4. 4. SubtitleSubtitle Global Reach 4 U.S. 60% Canada 14% Europe 17% Asia Pacific 9% 2013 Revenues by Operating Region • ITG is headquartered in New York, with 1,029 employees worldwide • 15 offices in 9 countries, including 9 trading desks
  5. 5. SubtitleSubtitle U.S. Macro Environment: Difficult But Improving Fund flows for U.S. mutual fund managers 2010-2014, $Billions 5 Source: Investment Company Institute -70.00 -50.00 -30.00 -10.00 10.00 30.00 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 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 International Equity U.S. Equity Total Bond
  6. 6. SubtitleSubtitle 6 International: Europe Driving Growth, Asia Pacific Closer to Profitability $20,105 $17,575 $18,770 $19,336 $17,911 $21,794 $22,663 $26,385 $32,832 $31,097 $12,793 $10,477 $11,396 $9,774 $12,134 $3,447 $2,749 $2,321 $4,559 $3,544 $4,358 $4,115 $7,670 $10,742 $8,707 -$405 -$652 -$256 -$1,729 -$208 -$5,000 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 Canada Revenue Europe Revenue Asia Pac Revenue Canada Pre-tax Europe Pre-tax Asia Pac Pre-tax
  7. 7. SubtitleSubtitle 7 International Opportunities Europe • Ranked #1 among large firms polled by Greenwich Associates in Europe for best anonymity in a dark pool • POSIT had over 13% share of European dark trading in 1H14 • 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 Growing Segment • International operations comprised 45% of total revenues and more than two thirds of total pre-tax income in 1H14 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
  8. 8. SubtitleSubtitle ITG at a Glance 8 • Solid balance sheet, strong cash flow generation and active buyback program • Unique, market-leading assets for execution, research and trade analysis • Solid international platform with significant growth opportunities • Disciplined expense management increases operating leverage, resulting in 40-50% pre-tax margins on incremental revenue
  9. 9. SubtitleSubtitle Second Quarter 2012 Earnings 1/2012 Appendices: Product Offerings 9
  10. 10. SubtitleSubtitle Second Quarter 2012 Earnings 1/2012 10 Electronic Brokerage Featuring: ITG Algorithms POSIT Clean, global dark liquidity. Average US Daily Volume of 67mm shares in 2Q 2014 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 Featuring: POSIT Alert • High-quality block crossing opportunities before they reach the market. Average trade size is 33,000 shares. • #1 Clients’ Choice Top Five Dark Pools, TABB US Institutional Equity Trading Survey • #1 for Best Anonymity in a Dark Pool, Greenwich Associates • Ranked #1 market share by Tabb Group and #1 speed and price improvement by The Trade • Algo trading available in 40 countries. Offer algorithms for equities, futures and options • ITG Dynamic Open named best algo by Wall Street Letter
  11. 11. SubtitleSubtitle 11 Featuring: ITG Investment Research ITG Industry Investment Research Data-driven insights on more than 350 companies in 20+ sectors in Energy, Consumer, Internet and TMT areas ITG High Touch and Portfolio Trading High touch traders provide expert execution coupled with ITG Investment Research insights. Seasoned portfolio traders provide high-touch and electronic list trading globally. • Exclusive data provider relationships • Groundbreaking, proprietary methods for analyzing massive amounts of data • Highly skilled, quantitative research followed by seasoned, expert analysis • Data-drivem economic notes and macro reports Research, Sales & Trading
  12. 12. SubtitleSubtitle 12 Featuring: Triton Platforms 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 • 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 Execution Management Systems Global, broker-neutral and multi-asset EMSs ITG Order Management Systems ITG OMS: Global, multi-asset enterprise OMS ITG Position Manager: Dedicated Hedge Fund OMS ITG Net Providing EMS and OMS FIX connectivity with approximately 9,000 global connections.
  13. 13. SubtitleSubtitle 13 Analytics Featuring: ITG TCA® • 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 Trading Analytics Alpha preservation throughout the trading process ITG Portfolio Analytics Portfolio modeling, optimization, and pricing ITG Analytics Services Investment process consulting to improve execution 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. Featuring: ITG Smart Trading Analytics
  14. 14. SubtitleSubtitle 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. 14Disclaimers