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ITG (NYSE:ITG) Investor Presentation
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Second Quarter 2012 Earnings 1/2012© 2014 Investment Technology Group, Inc. All rights reservedNot to be reproduced or retransmitted without permission. #021014-28382
ITGInvestorOverviewFebruary 2014February 2014
SubtitleSubtitleInsights Grounded in Data
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We believe that performance improvement and risk management must occur throughout the investment process and be grounded in fact.
SubtitleSubtitle
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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.
SubtitleSubtitleInvestment Highlights
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International Growth
ITG has achieved product parity in its three international operating regions (Europe, Canada and Asia Pacific)
• In 2013 International comprised 40% of total revenues and 65% of ITG net income.
Robust Balance Sheet
Unique Assets
Data-driven Research
Data-driven equity research on more than 350 companies in over 20 industries.
Dedicated sector traders and sales specialists in energy, consumer and TMT sectors.
Ownership of unique, market-leading trading assets. Expanding our platform globally to better serve clients.
• POSIT® – block crossing opportunities
• Triton® – global broker-neutral execution management
• ITG TCA® – multi-asset trading cost analysis
• Cash and equivalents of $262 million as of December 31, 2013
• 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%.
SubtitleSubtitleU.S. Macro Environment: Difficult But Improving Fund flows for U.S. active managers2010-2013, $Billions
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Source: Investment Company Institute
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International Equity U.S. Equity Total Bond
SubtitleSubtitle
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International ResultsEuropean Market Share Gains Driving Growth
$18,036$18,544
$20,105
$17,575$18,770
$16,854
$20,950$21,794
$22,663
$26,385
$9,570
$11,313
$12,793
$10,477$11,396
$2,522$2,576
$3,447 $2,749
$2,321$1,789
$3,501$4,358
$4,115
$7,670
-$1,793 -$865 -$405 -$652 -$256
-$5,000
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
4Q 12 1Q 13 2Q 13 3Q 13 4Q 13
Canada Revenue
Europe Revenue
Asia Pac Revenue
Canada Pre-tax
Europe Pre-tax
Asia Pac Pre-tax
SubtitleSubtitleUnique, Market-Leading Assets
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Execution Management Platforms
• 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
Transaction Cost Analysis
• 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
Crossing and Liquidity
• 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.
Algorithmic Trading
• 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
SubtitleSubtitle
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International Opportunities
Europe
• 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
Growing Segment
• 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
SubtitleSubtitleITG at a Glance
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• 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
SubtitleSubtitle
Second Quarter 2012 Earnings 1/2012Q4 2013 Earnings 1/30/14
Appendices: Research
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Featuring:
ITG Industry Investment Research
ITG Investment Research
ITG Industry Investment ResearchData-driven insights on industries and companies
ITG Economic ResearchData-driven economic notes and macro reports
• 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
SubtitleSubtitle
Second Quarter 2012 Earnings 1/2012Q4 2013 Earnings 1/30/14
Appendices:Liquidity
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SubtitleSubtitle
Second Quarter 2012 Earnings 1/2012 15
Electronic Brokerage
Featuring: ITG High Touch Trading Services
We put your trading goals first. Our experts are
backed by alpha-generating research, industry-
leading platforms, and analytics.
POSITClean, global dark liquidity. Average US Daily Volume of 63mm shares in 4Q 2013
ITG AlgorithmsSophisticated strategies for equities and futures
ITG Smart RoutingOne-point high-speed connection to liquidity
ITG NetGlobal FIX connectivity with trading insights
ITG Trading ServicesGlobal expertise across asset classes
Featuring: POSIT Alert
• 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
SubtitleSubtitle
Second Quarter 2012 Earnings 1/2012Q4 2013 Earnings 1/30/14
Appendices:Platforms
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SubtitleSubtitle
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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 SystemsGlobal, broker-neutral and multi-asset EMSs
ITG Order Management SystemsGlobal, multi-asset enterprise OMS
ITG Service ModulesSolutions to improve trading transparency and operational efficiency
SubtitleSubtitle
Second Quarter 2012 Earnings 1/2012Q4 2013 Earnings 1/30/14
Appendices:Analytics
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SubtitleSubtitle
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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 AnalyticsAlpha preservation throughout the trading process
ITG Portfolio AnalyticsPortfolio modeling, optimization, and pricing
ITG Analytics ServicesInvestment 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
SubtitleSubtitleDisclaimers
•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.
18Disclaimers