PRESS RELEASE

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ITG Reports 2003 Results

NEW YORK, NY, January 27, 2004 - Investment Technology Group, Inc. (NYSE: ITG), a leading provider of technology-based equity trading services, today announced that for the fourth quarter ended December 31, 2003, revenues were $86.5 million, net income was $12.5 million and diluted earnings per share were $0.27.

To ensure a clear understanding of these financial results, we are separately identifying certain non-recurring items pertaining to a tax settlement and asset impairment write-downs. Excluding these items, net income was $12.2 million and diluted earnings per share were $0.26.

Revenues rose 1% from third quarter 2003 levels while net income grew 11% and earnings per share were up 13%. Compared to the fourth quarter of 2002, revenues declined 8% while net income increased 3% and earnings per share grew 8%. Excluding non-recurring charges in both periods, revenues, net income and earnings per share declined 8%, 25% and 24%, respectively.

For the year ended December 31, 2003, ITG's total revenues were $334.0 million, net income was $42.0 million and diluted earnings per share were $0.89, a decline of 14%, 47% and 44%, respectively, versus the prior year, excluding non-recurring charges in both years.

ITG's international business achieved record revenues and pre-tax results for both the fourth quarter and the full year, aided in part by the weakness of the U.S. dollar. International revenues for the fourth quarter were $17.9 million, a $4.5 million (or 34%) increase over last year's fourth quarter, with $2.2 million of this growth due to currency fluctuations. For the year, International revenues were $60.2 million, an $18.7 million (or 45%) increase over last year, with $5.6 million of this growth due to currency fluctuations.

Revenues in Europe were up 9% to $7.3 million for the fourth quarter and up 33% to $26.0 million for the year. Revenues in Canada were up 78% to $7.1 million for the fourth quarter and up 49% to $22.7 million for the year. Revenues in Australia were up 67% to $2.0 million for the fourth quarter and up 24% to $6.2 million for the year. Revenues in Hong Kong were up 7% to $1.5 million for the fourth quarter and up 179% to $5.3 million for the year (due to the acquisition of Hoenig in September 2002).

Overall, ITG's International business posted its first pre-tax profit in the fourth quarter of $39,000 ($563,000 excluding non-recurring items) representing a $2.5 million improvement over the fourth quarter 2002 (excluding non-recurring items) with $538,000 of this improvement due to currency fluctuations. For the year, pre-tax losses, excluding these non-recurring items, from International operations were reduced 57% to $4.0 million versus $9.4 million in 2002, with $487,000 of this improvement due to currency fluctuations.

"2003 was a record year for our International operations," said Robert J. Russel, ITG's President and Chief Executive Officer. "We are extremely proud of the strong results they have achieved and encouraged by our first ever pre-tax profit from the International group. Although market circumstances are likely to return this segment to a loss in the first quarter of 2004, our fourth quarter results confirm our ability to achieve profitability in this segment of our business. We expect our International operations to continue to produce double digit revenue growth in 2004 and look forward to posting consistently profitable pre-tax results beginning in the middle of the year."

For the company overall, revenues per trading day in the fourth quarter of 2003 for the Electronic Trading Desk, POSIT and Client-Site Trading Products declined 9%, 3% and 21%, respectively, versus the fourth quarter of 2002. For the year, revenues per trading day for the Electronic Trading Desk increased 7% while declining 18% for POSIT and 30% for Client-Site Trading Products.

In the U.S. (excluding Hoenig), ITG's trading volume for the fourth quarter of 2003 was 4.8 billion shares (averaging 72.8 million shares per trading day) compared to 5.4 billion shares in the fourth quarter of 2002 (averaging 82.6 million shares per trading day). On a consolidated basis including international operations and Hoenig, total 2003 trading volume was approximately 10.4 billion shares for the fourth quarter and 38.9 billion shares for the year.

"Our domestic business faced significant headwinds in 2003," said Mr. Russel. "While we expect market conditions in the U.S. to remain challenging, we are encouraged by early signs of progress in our growth strategy with respect to Client-Site Trading products, where we recently launched two new products, and Analytical Products where we continue to produce best in class value-added trading tools."

For ITG overall, excluding non-recurring items, pre-tax margins for the fourth quarter were 23.4%, up from 22.7% in the third quarter but down from 28.4% in the prior year's fourth quarter. For the year, ITG's overall margins, excluding these non-recurring items, declined to 21.6% from 34.3% in 2002.

Non-Recurring Items

In the fourth quarter, ITG formally settled a long-standing Internal Revenue Service examination of research and development tax credits taken on ITG's federal income tax returns prior to 1996 which yielded a $2.2 million improvement to net income.

In addition, we recorded asset impairment charges totaling $2.7 million, principally pertaining to two New York Stock Exchange seats and our trading rights in Hong Kong which have been written down to their fair market value.

A full reconciliation of these non-recurring items is included in the table entitled "Reconciliation of U.S. G.A.A.P. Results to Pro-Forma Results" and in the Investor Relations section of ITG's website.

Conference Call

ITG has scheduled a conference call today at 11:00 a.m. ET to discuss fourth quarter results. Those wishing to listen to the call should dial 1-800-361-0912 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 888-203-1112 and entering the pass code 731355, and a two week-long replay will be available on ITG's website at http://www.itginc.com 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, Hong Kong, London, Melbourne, Sydney, Tel Aviv and Toronto. As a leading provider of technology-based equity-trading services and transaction research to institutional investors and brokers, ITG services help clients to access liquidity, execute trades more efficiently, and make better trading decisions. ITG generates superior trading results for its clients through three lines of business. POSIT, the world's largest equity matching system, allows clients to trade confidentially. The Electronic Trading Desk is recognized as one of the leading program trading operations in the U.S. ITG's leading-edge Client Site Trading Products allow users to implement their own trading strategies by providing direct electronic access to most sources of market liquidity. For additional information, visit http://www.itginc.com.

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; financial market volatility; general economic conditions in the United States and elsewhere; evolving industry regulation; cash flows into or redemption from equity funds; effects of inflation; customer trading patterns; and new products and services. These and other risks are described in greater detail in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and other documents filed with the Securities and Exchange Commission and available on the company's web site.

Click Here for Financial Information

Contacts:
Howard C. Naphtali
Chief Financial Officer
(212) 444-6160

Elise Wilkinson
Investor Relations
(212) 444-6245

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