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Investment Technology Group Reports Record First Quarter 2008 Results

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NEW YORK--(BUSINESS WIRE)--May 1, 2008--Investment Technology Group, Inc. (NYSE: ITG), a leading provider of technology-based trading services and transaction research, today announced that for the first quarter ended March 31, 2008, net income was $33.0 million, up 34 percent from net income of $24.7 million in the first quarter of 2007. Earnings were $0.75 per diluted share, an increase of 36 percent versus earnings of $0.55 per diluted share in the first quarter of last year. ITG's total revenue for the first quarter of 2008 was $204.3 million, 21 percent greater than total revenue of $168.9 million for the first quarter of 2007. Pre-tax margins in the first quarter were 28.9 percent in 2008, a significant increase over the 25.1 percent realized in 2007.

"ITG's revenues showed continued strength in the first quarter of 2008, as our geographical expansion and product diversification became key advantages for the firm," said Bob Gasser, ITG's Chief Executive Officer and President. "ITG's results clearly show that our business has built solid foundations both domestically and internationally and can thrive in various market conditions."

ITG's non-US revenues were $49.9 million in the first quarter of 2008, a 33 percent increase over revenues of $37.4 million in the first quarter of 2007. Non-US pre-tax income increased to $5.1 million in the first quarter of 2008 from $4.1 million in the first quarter of 2007.

"Despite the European and Asian market downturn, ITG continued to make progress on the expansion of its globalization strategy," said Mr. Gasser.

Conference Call

ITG has scheduled a conference call today at 11:00 a.m. ET to discuss first quarter results. Those wishing to listen to the call should dial 1-866-356-4123 and enter the pass code 93398330 at least 10 minutes prior to the start of the call to ensure connection. The conference call and webcast will also be accessible through ITG's web site at www.itg.com. For those unable to listen to the live broadcast of the call, a replay will be available for one week by dialing 1-888-286-8010 and entering the pass code 70323593. The replay will be available starting approximately two hours after the completion of the conference call.

About ITG

Investment Technology Group, Inc. (ITG), is a specialized brokerage firm that partners with clients globally to provide innovative solutions spanning the entire trading process. A pioneer in electronic trading, ITG has a unique approach that combines pre-trade, order management, trade execution, and post-trade tools to provide continuous improvements in trading and cost efficiency. The firm is headquartered in New York and maintains offices in North America, Europe and the Asia Pacific regions. For additional information, visit www.itg.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, 2007 and other documents filed with the Securities and Exchange Commission and available on the company's web site.

                  INVESTMENT TECHNOLOGY GROUP, INC.
                  Consolidated Statements of Income
               (In thousands, except per share amounts)

                                               Three Months Ended
                                                   March 31,
                                          ----------------------------
                                             2008            2007
                                          -----------   --------------
Revenues:
  Commissions                              $  176,227     $    143,913
  Recurring                                    21,645           19,182
  Other                                         6,406            5,833
                                          -----------   --------------
     Total revenues                           204,278          168,928
                                          -----------   --------------

Expenses:
  Compensation and employee benefits           67,628           58,515
  Transaction processing                       24,349           25,326
  Occupancy and equipment                      13,100           11,220
  Telecommunications and data processing
   services                                    12,750            9,134
  Other general and administrative             25,185           19,606
  Interest expense                              2,213            2,785
                                          -----------   --------------
     Total expenses                           145,225          126,586
                                          -----------   --------------
Income before income tax expense               59,053           42,342
Income tax expense                             26,065           17,632
                                          -----------   --------------
Net income                                 $   32,988     $     24,710
                                          ===========   ==============

Earnings per share:
Basic                                      $     0.76     $       0.56
                                          -----------   --------------
Diluted                                    $     0.75     $       0.55
                                          ===========   ==============

Basic weighted average number of common
shares outstanding                             43,629           44,074
Diluted weighted average number of common
shares outstanding                             44,231           44,838
                  INVESTMENT TECHNOLOGY GROUP, INC.
            Consolidated Statements of Financial Condition
                 (In thousands, except share amounts)

                                              March 31,   December 31,
                                                2008          2007
                                             -----------  ------------
                                             (unaudited)
Assets
Cash and cash equivalents                    $   265,811  $   183,757
Cash restricted or segregated under
 regulations and other                            55,145       71,300
Deposits with clearing organizations              41,272       43,284
Securities owned, at fair value                   10,992        8,022
Receivables from brokers, dealers and
 clearing organizations                        1,037,109      551,059
Receivables from customers                     1,152,371      676,522
Premises and equipment, net                       45,834       45,886
Capitalized software, net                         55,321       50,892
Goodwill                                         422,567      422,774
Other intangibles, net                            30,631       31,318
Deferred taxes                                     4,543        2,282
Other assets                                      12,369       13,791
                                             -----------  -----------
Total assets                                 $ 3,133,965  $ 2,100,887
                                             ============ ===========

Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued expenses        $   185,154  $   186,463
Short-term bank loans                             35,000      101,400
Payables to brokers, dealers and clearing
 organizations                                 1,104,551      497,124
Payables to customers                            906,778      457,105
Securities sold, not yet purchased, at fair
 value                                               551          859
Income taxes payable                              34,587       18,320
Deferred taxes                                     1,977        2,821
Long term debt                                   123,000      132,500
                                             -----------  -----------
  Total liabilities                            2,391,598    1,396,592
                                             -----------  -----------

Commitments and contingencies

Stockholders' Equity:
Preferred stock, $0.01 par value; 1,000,000
 shares authorized; no shares issued or
 outstanding                                          --           --
Common stock, $0.01 par value; 100,000,000
 shares authorized; 51,540,282 and
 51,503,221 shares issued at March 31, 2008
 and December 31, 2007, respectively and
 43,702,060 and 43,462,885 shares
 outstanding at March 31, 2008 and December
 31, 2007, respectively                              515          515
Additional paid-in capital                       212,069      210,071
Retained earnings                                684,665      651,677
Common stock held in treasury, at cost;
 7,838,222 and 8,040,336 shares at March 31,
 2008 and December 31, 2007, respectively       (174,360)    (177,928)
Accumulated other comprehensive income (net
 of tax)                                          19,478       19,960
                                             -----------  -----------
  Total stockholders' equity                     742,367      704,295
                                             -----------  -----------
Total liabilities and stockholders' equity   $ 3,133,965  $ 2,100,887
                                             ===========  ===========

    CONTACT: Investment Technology Group, Inc.
             Investor and Media Relations:
             Alicia Curran, 212-444-6130

    SOURCE: Investment Technology Group, Inc.

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