Troise, who started in January after the previous chief execuitve left ahead of a $ 20.3 million settlement with the Securities and Exchange Commission over a secret US proprietary trading programme it ran in 2010, has spent the first six months of his tenure completing what he termed an “end-to-end” business review that included meetings with more than 150 clients.
Since his arrival, ITG has either offloaded or closed non-core businesses including its investment research, Canadian arbitrage and US matched-book securities lending operations, and Troise wants the company to focus on its core equities franchise, spanning execution, liquidity, workflow and analytics services.
While buyside institutions such as asset managers and hedge funds are ITG’s primary client base, it also has a sizeable sellside business where it effectively rents its technology to banks, particularly at its Canadian unit.
Troise, who rejoined ITG from JP Morgan, told Financial News in an interview that one of his firm’s aims was to replicate that success globally.
He said: “Some bulge-bracket banks have continually looked at outsourcing elements of their execution infrastructure and that will be a big focus for us. I saw this in my first time round with ITG, as far back as 2001.”
Having worked at Lehman Brothers, Barclays Capital as well as JP Morgan, Troise said he has seen “firsthand the investments that some of the large firms have made in building execution infrastructure technology.”
He added that conversations with banks had made it “pretty clear” that some were looking to outsource elements of their infrastructure.
The level of investment now needed to build a competitive execution infrastructure is prompting many institutions to consider outsourcing parts of that infrastructure.
On August 3, Troise’s former employer, JP Morgan, agreed a three-year deal to use technology provided by electronic market-maker Virtu to help it trade in the dealer-to-dealer US Treasury market. Virtu chief executive Douglas Cifu said in an interview with The Wall Street Journal: “The theme here is big institutions reaching out to us and figuring out ways they can make their business more cost-efficient and scaleable using our technology and understanding of the market microstructure.”
Troise also said there had been some confusion about the firm’s strategy, given its past investments in research, but added it was now focused solely on products to help investors “after an investment decision is made”.
Troise said ITG would spend $ 40 million on its technology in the next 10 quarters. He also plans to hire 60 people, mostly in 2017, with an emphasis on tech and client coverage positions.