Virtu Financial, Inc. (NASDAQ:VIRT) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 08:30 am ET

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Virtu Financial, Inc. (NASDAQ:VIRT) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Douglas Cifu

we have made significant progress integrating our businesses as well as identifying and capturing meaningful revenue synergy opportunities. Building our leadership position and workflow automation products continues to be a priority at the forefront for Virtu. Specifically our multi-broker and multi-asset class EMS Triton is the engine at the nexus across our complete suite of products and services. We are encouraged with the growth we've seen from new and existing clients choosing to integrate more of our products into their daily operations.

In today's supplemental materials we have highlighted how clients have embraced the launch of analytics portal our FX and Fixed Analytics modules and are beginning to migrate to Triton Valor. As I've mentioned briefly we are launching today Virtue Capital Markets to provide select capital market services for issuers including at-the-money offerings -- at-the-market excuse me offerings and corporate buybacks. In the same way that our entry into the outsourced trading space was a natural extension of our native capabilities to provide more services to our client base Virtu Capital Markets likewise leverages our unique position and core market structure expertise technology platform and our broad global distribution network to deliver efficient and transparent products and solutions to the market. ATM offerings are a useful tool for a public company in any sector that is looking to raise equity capital. As with other parts of the financial services ecosystem there has been an increased focus on the cost and efficiencies of the capital raising function of the marketplace as witnessed by the recent increased focus on direct listings, as a more efficient alternative avenue for initial public offerings. An ATM offering provides efficiency at scale to an existing public company seeking to raise equity capital. As with other new initiatives we are applying Virtu efficiencies and expertise to enable us to engage with a growing sector in the capital markets.

As the leader in providing trading technology and liquidity to the buy side and sell-side the new Virtu Capital Markets business will allow us to offer those same core strengths to public companies through the ATM structure. Virtu Capital Markets is led by Jeff Lumby and Joshua Feldman both of whom have extensive records in the ATM space over the last 2 decades and were attracted to Virtu's global execution platform distribution and capabilities. Looking at our Market Making segment this quarter is a great example of how the strength and sustainability of Virtu's global diversified financial technology-driven market making operations continues to perform in any environment. Overall while realized volatility of major indices was mostly up global equity volumes were flat to down and retail engagement indicators like OTC volume lagged or flat. In short this quarter presented a mix of challenges and reduced opportunities for market-making. However despite these conditions we outperformed largely enabled by 2 factors: first, our efforts to increase our global reach has helped us grow our addressable opportunities; and second our efforts to improve our capture rates have helped improve our yield