SEC – Alphacution Research Conservatory

@VirtuFinancial: Yes, There Are More Acquisitions on the Way!

No problem can be solved from the same level of consciousness that created it. - Albert Einstein On October 4, news broke on all the major market news outlets that - after feasting on a meal formerly known as KCG Holdings, Inc. (KCG) in 2017, which itself was a combo platter made up of GETCO and Knight Capital - Virtu Financial, Inc. (Virtu) was returning to the all-you-can-eat buffet to consider the total consumption of multinational agency brokerage and financial markets technology firm, Investment Technology Group, Inc. (ITG). Of course, this news generated a chuckle around here because it seemed that it was not too long ago that someone was predicting that this kind of pairing would make sense for Virtu - if conditions were such that they needed to bolt something else onto their expanded frame. Oh, wait a sec, that was us... To wit, from Alphacution's post "Virtu Financial: More Acquisitions on the Way, If..." (March 27, 2018): "One other notable move for significant growth for a firm [...]

Operational Clues: Asset Managers Shifting Strategies

You can track shifting asset class and/or strategy allocations over several years for a long list of asset managers, and then add it all up to arrive at a data-driven industry trend. Easier said than done. This is an extremely heavy lift without the aid of a database that has already aggregated such information - if at all. But, we think there is another way to generate such a signal that yields a similar conclusion (if you know how to read the tea leaves). Hint: As always, it still comes down to the people... That preamble aside for the moment, we will spare you the geek-speak and give you the cart before the horse: In the exhibit below, based on US Securities and Exchange Commission Form ADV data for 181 large asset managers (w/ AUM >$10 billion) over the 5 years ending March 2017, Alphacution's newest analytic - assets under management per employee, or AUM/e - indicates, upon calculation of total weighted average AUM/e for all reporting funds per period, that strategy trade durations have been lengthening. Translation: On average, asset [...]