Virtu Financial, Inc. (NASDAQ:VIRT) Q4 2018 Earnings Conference Call - Final Transcript

Feb 07, 2019 • 07:00 am ET


Virtu Financial, Inc. (NASDAQ:VIRT) Q4 2018 Earnings Conference Call - Final Transcript


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Q & A

Thank you. (Operator Instructions) Your first question comes from Rich Repetto from Sandler O'Neill. Your line is open.

Richard Repetto

Yeah. Good morning, Doug. Good morning, Joe. And -- first, congrats on a strong quarter, even better than the pre-announced results. So I've already got an email saying that, it sounds like that you're more bullish on the ITG acquisition, and I guess the question is, we've talked to clients, we know you've been out as you said in the prepared remarks out talking to clients and just some feedback and why, the feedback we've gotten had been incrementally positive. And like how are you getting people over -- or getting to that more positive view a couple of people that we talk to certainly more positive after they talk with you, could expound on that?

Douglas Cifu

Sure. Yes, thank you and good morning, Rich. Yeah, I think it's really two elements to that. The first is, you're right, we've been out there, we've talked to dozens and dozens of ITG customers, both here in Canada and in Europe and I think there's obviously the initial concern around we're adding an additional conflict because ITG historically has been an agency business and where we get that we're very sensitive to that and we're very direct and transparent about that.

I think they like the transparency and the directness of Virtu, we have no other way of conducting business. There's no gray area at Virtu, it's all black and white, hence we've been very upfront about how we will physically and virtually separate the businesses to ensure that we are good stewards of customer information, and all the things that you would expect that we do and I think customers are encouraged to hear those words. I think, to flip it on, it's head though, I think there's a lot of excitement from the customer segment and indeed from the ITG folks with regard to the capabilities that Virtu has -- as effectively an execution firm that is multi-asset class and multi-geography.

There's really a clamoring out there in the marketplace for expertise that ITG has in global equities, but also in FX in fixed income and in commodity products right, because everybody has needs in those areas or lot of these firms have needs in those areas and historically ITG has tried to provide some of those services through Triton and through analytics. And they've done a terrific job with the tools that they have, but now partnered with a firm that makes its living, today, 90% of its living, being a market maker in those markets, it's just an incremental amount of expertise. Think about the investments that Virtu has made historically in financial technology.

You see our P&L, you see what we spend on technology and on personnel, at somewhere in the area of about $200 million to $250 million a year, ensuring that we are the most robust and the most state-of-the-art, if you will, in financial technology around the world.