I have always believed that the cornerstone of Virtu’s success lies in our ability to scale and adapt our technology and services to meet the market’s demands. Our willingness and flexibility to redefine and expand what Virtu means to our clients, shareholders and the global capital markets is what keeps us at the forefront of such a rapidly evolving industry.
Over the course of 2018 and 2019, we observed an accelerated pace of change, largely driven by technology and continued fragmentation of capital markets, leading to the increased adoption of electronic trading solutions across more asset classes. In response, we invested in adapting our complementary strengths to meet the growing demands of our institutional clients.
In March of 2019, we completed our acquisition of ITG which added significant scale to our growing business. ITG was a pioneer in the global execution services business and our combination leverages Virtu’s financial technology—the same technology that drives our market making performance—to optimize all aspects of the business, from order routing and algo performance to middle- and back-office efficiencies.
In the first year following the ITG transaction, we made significant integration progress, realizing meaningful synergies within both revenues and expenses. We have enhanced our operating leverage and scale, improving our competitive positioning and allowing us to launch new organic growth initiatives that leverage our existing capabilities. Central to Virtu’s mission, we have also amplified our ability to help clients source liquidity and improve their workflow.
Some of our 2019 initiatives included: the launch of Execution Concierge Service (ECS), our global and broker-neutral outsourced trading service; the expansion of our Analytics Portal; the release of Triton Valor, our next generation and multi-asset class global execution management system (EMS); technology and logic upgrades to POSIT Alert, our anonymous block indications network, which improved latency in the US by 73%; the introduction of Virtu Capital Markets, which assists public companies raising equity capital through our At-the-Market (ATM) offering; and the extension of our asset class coverage through the addition of fixed income and FX products to our Trade Analytics and Data suite.
We also took important steps to further strengthen our balance sheet by refinancing our long-term debt and locking in lower rates. We remain committed to paying our dividend, which has totaled 85% of earnings since our IPO in 2015.
Thus far, 2020 has posed a completely different challenge. Although we are still in the early days of seeing the full impact of COVID-19, I am struck by how acutely the pandemic has touched so many facets of daily life—upending communities, businesses and economies the world over. Historic levels of trading activity and volatility have spread across all markets and asset classes, testing people, networks, connectivity and systems.
We remain focused on the health and safety of our employees and we are operating with over 95% of our global staff working from home. Our people have been amazing at adapting to this challenging environment and we have continued to innovate and deliver client-driven solutions in these difficult times.
I am honored, in better times and especially during this period of uncertainty, to lead a team so passionately devoted to delivering excellence in all aspects of our business and client-service efforts. Our people are the best of Virtu.
As a trusted trading partner and liquidity provider to the global markets, we play a critical role in the electronic trading ecosystem by supporting the orderly transfer of risk and ensuring a well-functioning market.
Today, our market making operations leverage technology to provide liquidity for investors and other market participants on hundreds of venues in over 35 countries around the world and our two-sided liquidity facilitates price discovery in over 25,000 financial instruments. In 2019, we improved price on over 75% of retail orders, delivering over $300 million of price improvement to retail investors.
As a financial technology company, we have no omniscient view on the direction of markets or market sentiment; what we do is adhere to our founding principles: integrity, transparency, innovation and reliability, and this has served us well. From the earliest days in the commodities trading pits—where price discovery and transferring risk from buyers to sellers was confined to the floors of exchanges and transactions took place by hand signals, open outcry and paper trading tickets—we have charted Virtu’s growth trajectory guided by these standards.
Our capacity to quickly adapt to changing environments is not only a competitive advantage, it fuels our objective to deliver, for the buy-side, a transparent and efficient one-stop shop to service their needs throughout the entire trade lifecycle.
2019 was a busy year, and if the first quarter of 2020 is any indication, we should expect more of the same this year. Today, more than ever, our clients rely on us both for the liquidity access we provide them and the high quality, independent, useful technology and measurement of their performance. They put their trust in us every day—a trust we have earned over many decades. Despite changes brought on by COVID-19, we are improving our platforms and refining other tools so that we, our clients and our investors can all emerge stronger.
There is power in continually refocusing on the idea of change—it has helped define Virtu’s legacy and it will be instrumental to our future.
Douglas Cifu
Chief Executive Officer