ITG 2000 Diluted Earnings Per Share Increase 31%

NEW YORK, January 18, 2001 -- Investment Technology Group, Inc. (NYSE:ITG), a leading provider of technology-based equity trading services, today announced that for the year ended December 31, 2000, net income rose 29% to $63.6 million and diluted earnings per share increased 31% to $2.02 compared with the same period a year ago adjusted for ITG's spin-off from Jefferies Group, Inc. In 1999, diluted earnings per share were $1.54 before spin-off expenses and $1.42 after spin-off expenses.

Revenue for the year 2000 increased 34% to $310.4 million and trading volume of 16.4 billion shares was 42% above 1999.

"ITG's accelerated growth this year reflects the intense pressure on fund managers to control their trading costs in the current challenging environment for the institutional investment community," said Raymond L. Killian, Jr., ITG Chairman, President and Chief Executive Officer. "We drove an important part of this year's growth by expanding our automated and anonymous trading services and advanced research tools that allow investment managers to cut substantially the non-commission, or market-impact, costs of trading, which account for the vast majority of total trading costs."

During the fourth quarter ended December 31, 2000, ITG's average daily revenues grew 20% and total revenues grew 11% compared with the fourth quarter of 1999. This average daily revenue growth included increases of 43% in Client Site Products, 36% for the Electronic Trading Desk and 1% in ITG's POSIT® electronic crossing system. The relative performance of these business lines reflects the diverse capabilities of ITG's model in capturing investor usage over a wide variety of changing market conditions.

Trading volume during the quarter was 4.2 billion shares, compared with 3.4 billion shares in the same quarter last year and 4.0 billion in the third quarter of 2000.

For the fourth quarter, net income was $14.6 million compared to $15.7 million in last year's comparable period, adjusted for the impact of the spin-off. Diluted earnings per share were $0.46 compared with $0.50, adjusted for the spin-off. ITG's net incremental spending on international expansion and related development programs was equivalent to approximately 8 cents per diluted share during the fourth quarter of 2000 vs. 1999. Prior to these charges, ITG's earnings growth was in line with its revenue growth.

During 2000, ITG continued to build the foundation for international growth by starting up a new business in Canada, expanding its European venture into seven additional countries and acquiring 100% of operations in Australia which it previously partly owned. On January 16, 2001, ITG announced that it had signed an agreement to acquire the remaining interest in its European joint venture from Societe Generale for $18.5 million, subject to receipt of certain regulatory approvals. Taking full ownership of these international businesses provides ITG with strategic flexibility on a global basis. The company's Australian subsidiary is already profitable, Canadian profitability is expected within approximately one year while European operations are expected to achieve profitability in late 2002.

"For 2001, we remain confident of growing at 20-30% on both the top and bottom lines, despite the continuing challenges facing the institutional investment community," said Mr. Killian. "Our optimism is based on investors' increased focus on controlling their trading costs, the large investment we are making in the technology and research products that empower them to do so, the diverse products we now have to meet investors' needs in a variety of market conditions, and the progress we are making on international expansion."

ITG has scheduled a conference call today at 10:30 a.m. ET to discuss fourth quarter and year-end earnings and the outlook for 2001. Those wishing to listen to the call should dial 1-800-289-0468 at least 10 minutes prior to the start of the call to ensure connection. For those unable to listen to the live broadcast of the call, a week-long replay will be available by dialing 1-888-203-1112 and entering the passcode 563457, and a two week-long replay will be available on ITG's website at starting approximately 2 hours after the completion of the call.

About ITG

ITG is headquartered in New York with offices in Boston, Los Angeles, Dublin, London, Melbourne, Sydney, Tel Aviv and Toronto. As the leading provider of technology-based equity trading services and transaction research to institutional investors and brokers, ITG generates superior trading results for its clients. ITG's services help clients to access liquidity, execute trades more efficiently and make better trading decisions. ITG's cutting edge trading tools are easy to use and interface seamlessly with clients' workflow. As an electronic broker, ITG differentiates itself with institutional customers via front-end or desktop services that provide unique content and connectivity. In the electronic trading marketplace, through its POSIT system, ITG is the premier confidential stock-crossing system for the industry. Further information can be accessed on ITG's Web site at

In addition to historical information, this press release may contain "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995, that reflect management's expectations for the future. A variety of important factors could cause results to differ materially from such statements. These factors include the Company's ability to achieve expected future levels of sales; the actions of both current and potential new competitors, rapid changes in technology, fluctuations in market trading volumes, market volatility, changes in the regulatory environment, risk of errors or malfunctions in our systems or technology, cash flows into or redemptions from equity funds, effects of inflation, customer trading patterns, general economic and business conditions, securities, credit and financial market conditions, as well as adverse changes or volatility in interest rates. These and other risks are described in greater detail in the Company's filings with the Securities and Exchange Commission including those on forms 10-K and 10-Q.

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