NEWS UPDATE
REGULATION
Virtu Financial reveals plans to
launch outsourced trading desk
Virtu Financial targets the buy-side with an outsourced trading desk and will bring
the ITG Triton EMS to FX markets as part of a major strategy renewal.
V
irtu Financial has said it will launch an outsourced
trading service and bring the Triton execution man-
agement system (EMS) to FX markets, as part of a major
strategy revamp following its $1 billion acquisition of
agency broker ITG.
The high-speed trading firm’s chief executive, Doug
Cifu, told analysts on Virtu’s second quarter earnings call
that the initiatives are part of plans to provide clients
with a complete and holistic service.
Known as Execution Concierge Service (ECS), the
outsourced trading service will use Virtu’s multi-broker
technology platform and products, combined with its
high-touch trading and global client coverage. Cifu said
that ECS will target small-to-mid-sized asset manag-
ers and investment firms that want to use outsourced
trading to supplement internal trading desks. The new
trading service will be led by ITG veteran and Virtu man-
aging director, Jack Pollina.
“You don’t need to build that capability and have it
internally, we can either do it with the folks you have or,
6 // TheTrade // Fall 2019
frankly, provide that turnkey solution,” Cifu added. “We
really think it’s a compelling offering, and in a world that
screams for efficiency and scale, we think we can do that.
We think we can grow with these clients and then [they]
become long-standing Virtu clients.”
Virtu Financial closed its $1 billion acquisition of ITG
in March this year. Despite reporting a net loss of $55.5
million in the second quarter due to costs associated with
the takeover, the company said that its execution services
business is already seeing the upside from the integration
of the ITG business.
Since the deal with ITG, Virtu said it has hired more than
40 people globally and added 50 new clients for its suite
of broker-neutral products, including Triton and the TCA
portal. Cifu acknowledged that a minority of clients did
reduce or turn off the firm’s services due to industry con-
cerns after the ITG acquisition was announced, as a result
of Virtu’s market making capabilities and its integration
with ITG, which operates as an agency broker.
“In a large, large measure, I would say globally they
are in the very distinct minority,” Cifu said about these
clients. “In fact, we’ve seen significant pickup from large
global asset managers and pension plans whose names
you would know very well… I’m very pleased with the
progress we have made integrating ITG, and we have
seen clients respond very positively to Virtu technology,
our continued commitment to customer service, and the
transparency we deliver as part of our client solutions.”
At the same time, Virtu is gearing up to launch an
upgraded version of the ITG Triton EMS and transaction
cost analysis (TCA) portal. The next generation of Triton,
known as Triton Valor, has been bolstered with new
technology, integrated with the TCA portal, and will have
FX trading capabilities for the first time. Cifu said that
Virtu expects a significant uptake in that area as clients
increasingly adopt its FX algo for liquidity.