THB Asset Management to Become Victory
Capital’s 10th Investment Franchise
Victory Capital Holdings, Inc. (NASDAQ: VCTR) (“Victory Capital”
or the “Company”) today announced that it has signed a definitive
purchase agreement to acquire certain assets of THB Asset
Management (“THB”).
The transaction is expected to close in early 2021 and be
immediately accretive to earnings. Consistent with Victory
Capital’s model, THB’s investment team will become employees of the
Company and the newly created Franchise will be subject to a
compensation agreement based on revenue sharing. No material
consideration will be paid for the assets.
“We are pleased to welcome the THB investment team and their
clients to Victory Capital,” said David Brown, Chairman and CEO.
“With investment strategies in asset classes where we have
extensive operating and distribution experience, we look forward to
a seamless and efficient integration as we also continue to
evaluate a wide variety of other acquisition prospects. Our scaled
and integrated platform appeals to leading investment professionals
by combining the benefits of an established operating and
distribution infrastructure while preserving the autonomy of their
investment process and unique brand.”
THB’s Chief Investment Officer, Christopher Cuesta, commented,
“Our investment team is delighted to be joining forces with Victory
Capital. Their entrepreneurial culture, strategic vision and
appreciation of capacity constrained strategies aligns perfectly
with our heritage. This transaction will not affect our investment
philosophy or process, and we look forward to devoting all our
attention to managing portfolios and serving clients from our
current location in Norwalk, CT. We have significant capacity to
grow assets in our products and believe Victory Capital’s broad and
deep distribution network—coupled with its ability to develop
in-demand products and investment vehicles—will accelerate our
growth.”
“THB’s investment performance track record demonstrates a
genuine edge,” Brown added. “Its strategies have consistently
outperformed respective benchmarks throughout various market cycles
and rank among the top tier of their strategy peer groups. Aligning
with our responsible investing goals, THB has a 30-year history of
managing socially responsible investment portfolios with ESG
considerations fully integrated into the investment process for
each of its strategies. In addition, the team also seeks
investments in sustainable impact themes such as renewable energy,
carbon capture and storage, green technologies, and environmentally
friendly products.”
Founded in 1982, and formerly known as Thomson, Hortsmann &
Bryant, THB Asset Management is based in Norwalk, CT, and will
remain in its current location. The team currently manages
approximately $435 million in equity assets in capacity
constrained, micro-cap, small-cap, and mid-cap asset classes,
including strategies managing U.S., international and global
portfolios. THB serves clients in the U.S. and in Europe and
Australia through long-established partnerships with Carolon
Capital and Brookvine, providing Victory Capital with additional
offshore distribution relationships and opportunities.
Table: THB Investment Performance
THB Asset Management Peer
Rankings and Excess Returns vs. Benchmarks, as of Sep 30,
2020
Micro-Cap1
Small-Cap2
Mid-Cap3
International
Opportunities4
QTD
Peer Rank (%)
4%
30%
7%
4%
Excess return vs. benchmark
+867 bps
+123 bps
+260 bps
+551 bps
1-Year
Peer Rank (%)
24%
14%
9%
7%
Excess return vs. benchmark
-100 bps
+720 bps
+936 bps
+1,298 bps
3-Year
Peer Rank (%)
25%
32%
10%
8%
Excess return vs. benchmark
+75 bps
+128 bps
+620 bps
+511 bps
5-Year
Peer Rank (%)
20%
21%
18%
2%
Excess return vs. benchmark
+242 bps
+135 bps
+276 bps
+846 bps
10-Year
Peer Rank (%)
35%
64%
NA
NA
Excess return vs. benchmark
+64 bps
-59 bps
NA
NA
Since Inception
Jun 1998
Jan 1992
Feb 2014
Apr 2015
Excess return vs. benchmark
+444 bps
+61 bps
+297 bps
+819 bps
Performance data quoted represents past performance net of fees
and is not indicative of future results. Periods greater than 1
year are annualized. Returns represented include reinvestment of
dividends and other income. Benchmark Indexes: 1) Russell Microcap;
2) Russell 2000; 3) Russell Midcap®; and, 4) MSCI EAFE Small
Cap
Source: eVestment and THB Asset Management. eVestment universe
rankings reflect the following independent category
classifications: U.S. Micro Cap Core Equity; U.S. Small Cap Core
Equity; U.S. Mid Cap Core Equity; and EAFE Small Cap Core
Equity.
Closing is subject to customary approvals, conditions and
consents, including approvals by the shareholders and board of
trustees of the THB-advised mutual fund.
BofA Securities served as financial advisor to Victory Capital,
and Willkie Farr & Gallagher LLP served as legal advisor to
Victory Capital. Acclinate LLC served as consultant to THB Asset
Management.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements may include, without limitation, any
statements preceded by, followed by or including words such as
“target,” “believe,” “expect,” “aim,” “intend,” “may,”
“anticipate,” “assume,” “budget,” “continue,” “estimate,” “future,”
“objective,” “outlook,” “plan,” “potential,” “predict,” “project,”
“will,” “can have,” “likely,” “should,” “would,” “could” and other
words and terms of similar meaning or the negative thereof. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond Victory Capital’s
control such as the COVID-19 pandemic and its effect on our
business, operations and financial results going forward, as
discussed in Victory Capital’s filings with the SEC, that could
cause Victory Capital’s actual results, performance or achievements
to be materially different from the expected results, performance
or achievements expressed or implied by such forward-looking
statements.
Although it is not possible to identify all such risks and
factors, they include, among others, the following: reductions in
AUM based on investment performance, client withdrawals, difficult
market conditions and other factors such as a pandemic; the nature
of the Company’s contracts and investment advisory agreements; the
Company’s ability to maintain historical returns and sustain its
historical growth; the Company’s dependence on third parties to
market its strategies and provide products or services for the
operation of its business; the Company’s ability to retain key
investment professionals or members of its senior management team;
the Company’s reliance on the technology systems supporting its
operations; the Company’s ability to successfully acquire and
integrate new companies; the concentration of the Company’s
investments in long-only small- and mid-cap equity and U.S.
clients; risks and uncertainties associated with non-U.S.
investments; the Company’s efforts to establish and develop new
teams and strategies; the ability of the Company’s investment teams
to identify appropriate investment opportunities; the Company’s
ability to limit employee misconduct; the Company’s ability to meet
the guidelines set by its clients; the Company’s exposure to
potential litigation (including administrative or tax proceedings)
or regulatory actions; the Company’s ability to implement effective
information and cyber security policies, procedures and
capabilities; the Company’s substantial indebtedness; the potential
impairment of the Company’s goodwill and intangible assets;
disruption to the operations of third parties whose functions are
integral to the Company’s ETF platform; the Company’s determination
that Victory Capital is not required to register as an "investment
company" under the 1940 Act; the fluctuation of the Company’s
expenses; the Company’s ability to respond to recent trends in the
investment management industry; the level of regulation on
investment management firms and the Company’s ability to respond to
regulatory developments; the competitiveness of the investment
management industry; the dual class structure of the Company’s
common stock; the level of control over the Company retained by
Crestview GP; the Company’s status as an emerging growth company
and a controlled company; and other risks and factors listed under
"Risk Factors" and elsewhere in the Company’s filings with the
SEC.
Such forward-looking statements are based on numerous
assumptions regarding Victory Capital’s present and future business
strategies and the environment in which it will operate in the
future. Any forward-looking statement made in this press release
speaks only as of the date hereof. Except as required by law,
Victory Capital assumes no obligation to update these
forward-looking statements, or to update the reasons actual results
could differ materially from those anticipated in the
forward-looking statements, even if new information becomes
available in the future.
About Victory Capital
Victory Capital is a diversified global asset management firm
with $132.7 billion in assets under management as of September 30,
2020. The Company operates a next-generation business model
combining boutique investment qualities with the benefits of a
fully integrated, centralized operating and distribution
platform.
Victory Capital provides specialized investment strategies to
institutions, intermediaries, retirement platforms and individual
investors. With nine autonomous Investment Franchises and a
Solutions Platform, Victory Capital offers a wide array of
investment styles and investment vehicles including, actively
managed mutual funds, separately managed accounts, active ETFs,
multi-asset class strategies, custom-designed solutions and a 529
College Savings Plan.
For more information, please visit www.vcm.com or follow us:
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version on businesswire.com: https://www.businesswire.com/news/home/20201104005382/en/
Investors: Matthew Dennis, CFA Chief of Staff Director,
Investor Relations 216-898-2412 mdennis@vcm.com
Media: Tricia Ross 310-622-8226 tross@finprofiles.com
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