Investment Technology Group [NYSE:ITG]: The Gateway to Portfolio Risk Mitigation

Investment Technology Group [NYSE:ITG]: The Gateway to Portfolio Risk Mitigation

CIO VendorFrancis J. Troise, CEO & President Many high net worth financial firms and investment banking firms brainstorm over investing in volatile markets where determining probabilities and profitability is an upstream task. To wade past the market uncertainties and regulatory scrutiny, investors, and asset and fund managers need a greater degree of transparency across investment portfolios. It is no longer good enough to just have consistent outperforming returns; the key to meet investment objectives also lies in identifying the unique technique of capturing insights and analysis. Apropos to this, a recent research from ReportsnReports revealed that the Americas lead the global project portfolio management and analytics market, occupying around 58 percent of the total market share. This trend is indicative of the willingness of firms to invest in advanced analytics and automation systems to support their numerous investment related decisions.

With an unwavering commitment to provide actionable investment insights, Investment Technology Group [NYSE:ITG]—an independent broker and financial technology solution provider—was founded with the belief that technology could empower investors to improve performance while reducing transaction costs. “Technology is our middle name and is at the heart of everything we do,” explains Francis J. Troise, CEO and President, ITG. With 15 offices across nine countries and multi-asset capabilities that support the needs of institutional investors and hedge funds, New York City, NY headquartered ITG partners with global traders and portfolio managers throughout the investment process— from investment decision through settlement. The firm’s accurate modeling of real-world investment problems enables clients to research and develop funds based on a variety of strategies and styles including quantitative, fundamental, active, passive, hedge fund and setting up taxable separate account portfolios to track various constraints.

Minimize Market Impact and Maximize Transparency

To navigate increasingly complex markets, ITG was founded with the launch of the POSIT—a solution that helps traders anonymously source diverse block liquidity. Solving complex portfolio investment problems and eliminating “what if” scenarios, ITG aids customers to quickly construct, rebalance, and test optimal portfolios to manage costs, reduce tax liability, and minimize risks with a powerful network of intellectual capital, true industry experience, and market-leading technology. The firm’s cutting-edge decision support tools are grounded in real-world execution data, enabling users to make informed decisions.

ITG works with clients to curb implementation slippage, provides tools to enable them to measure transaction costs, and also offers workflow tools to lower costs and improve operational efficiency.

We believe that with passion, discipline, and a commitment to excellence we will capitalize on the significant opportunities available across all of our businesses

“Our focus is on execution and innovation in key areas—liquidity, single-stock program, electronic trading, analytics and workflow tools. We are in this business to be a global best-in-class solution provider across the activity chain,” Troise adds. The firm’s strong client relationship is reflective of Troise’s leadership skills and deep acumen and experience in growing electronic trading operations. This extensive trading experience is steering ITG ahead and enabling it to reaffirm its position as a pioneer in innovation and a key partner to the institutional investment community.

Fairly Price International Equities

In today’s intricate market space, even the most experienced traders are concerned about gaming, phishing, and other predatory trading practices. ITG empowers capital market firms to source quality liquidity across equities and fixed income. The firm’s clientele includes institutional investors and broker dealers that are eligible to become POSIT subscribers, thus enabling them to enter orders via ITG’s Triton EMS, ITG OMS, ITG’s agency trading desk, or any certified FIX connection. Orders can be submitted either as Day Orders or Immediate or Cancel (IOC) Orders. Any exchange-listed security and some of the more liquid OTC Bulletin Board securities can be traded in POSIT. While POSIT was originally established with scheduled (point-in-time) crossing in 1987, today it runs on a continuous crossing basis during regular U.S. trading hours.

Additionally, having created the first online service of its kind to efficiently calculate an estimated swing price based on hidden variables, ITG’s comprehensive approach helps compare swing pricing factors using different variables for greater accuracy. The firm extends data services to provide asset managers with the underlying swing pricing components required for the calculation of a swing pricing factor. This includes price-impact on a weekly spread for over 60,000 equities across the U.S., Canada, and Europe. Contrary to cumbersome manual calculations, ITG’s Swing Pricing Service automates and streamlines processes, and enables users to compare dilution costs based on various assumptions. Customers, simply have to enter parameters and receive an estimated swing price factor in less than a second.

With accurate adjustments co-efficiencies for over 85,000 securities across more than 78 markets, the company helps customers establish fair and consistent prices across multiple asset classes throughout the portfolio. ITG’s fair value services help funds reduce the risk of opportunistic market timing. The fair value service also assists clients to fairly price international equities and equity index futures, protecting the interests of fund shareholders, while meeting regulatory obligations.

Transforming the IT Workforce

ITG’s team-oriented culture, innovative approach to common corporate issues, and encouragement of employees’ professional and academic development contributes to an environment where diversity and inclusion are recognized as crucial components of success. Culture is ITG’s biggest weapon; it is the fuel that drives the whole business forward. Moreover, the company is dedicated to attracting, retaining, and developing talented individuals, in addition to driving innovation and growth through diversity and inclusion. The firm adheres to these principles by recruiting, retaining, and developing qualified individuals with a variety of backgrounds and abilities. ITG has evolved globally because of the collaborative energy, unique skill sets, and experiences of employees.

"Our focus is on execution and innovation in key areas—liquidity, single-stock program, electronic trading, analytics and workflow tools"

With a heritage of innovation and delivering cutting-edge solutions, “We approach clients from the standpoint of what their challenges are and how the client solves those obstacles. We represent what we can bring to the table and we also give our view on industry challenges,” says Troise. ITG proffers a set of solutions across the entirety of the activity chain, from the moment investment decision is made, starting with pre-trade analytics, to trade scheduling, intra-trade analytics, and post-trade analytics. “We work with the client to evaluate the efficacy of the game plan, and then partner with them to improve the process. Our offering is complete across the trading activity chain—a key differentiator relative to mono-line players,” he adds.

Unrelenting Pursuit of Excellence

Troise foresees a number of trends developing around the world that could become positives for ITG; in particular, the increasing focus on best execution and unbundling. He asserts that the focus among asset managers on improved measurement of trade performance and separation of research and execution commission dollars is something that ITG can take advantage of globally. While regulatory pressure has driven this forward in Europe, Troise notes that other parts of the world are following that lead as their clients in turn seek more transparency over the way their money is spent and invested.

“Over the last several months, we have conducted an end-to-end business review and developed a plan to grow our revenues and expand our margins. We believe that with passion, discipline, and a commitment to excellence we will capitalize on the significant opportunities available across all of our businesses,” explains Troise. ITG’s relevance in the client community, the geographical growth and end-to-end breadth of the product offering is the firm’s key priority.