ith its announced deal to purchased NewBridge Partners
, Victory Capital
is the latest money manager to pick up a boutique investment manager. The investment management arm of Cleveland-based KeyCorp bank is making the deal to bulk up its separately managed account business and diversifying its product line.
While NewBridge manages only $2 billion in assets to Victory's equity portfolio of $23 billion, its specialty is large cap, growth equity management, an area of expertise for which Victory is not currently known. Victory has built a reputation for its abilities as a value investor. Within the conservative separately managed account business it may be easier and quicker to acquire the reputation of another manager than build the capabilities internally.
"NewBridge is a great fit for us, because our products are different, but our people and processes are very similar," said Rick Buoncore
, president and CEO of Victory Capital Management. "NewBridge's 'growth' style is a perfect complement for Victory's 'value' style of equity investing. Yet both our firms follow well-articulated disciplines with a responsible level of risk."
Victory officials also said that they intend to leverage NewBridge's capabilities to launch a new growth-focused mutual fund.
NewBridge has 31 employees in four offices, including its New York City headquarters and regional offices in Denver, St. Petersburg, Grand Rapids and Austin. Victory, which has 55 employees in its New York City office, plans to retain all of NewBridge's investment professionals. However, it will take over all of the marketing and distribution of NewBridge's products under the "Victory NewBridge" name. It will also take over the administrative side of NewBridge's business.
NewBridge executives, including CEO James Cowperthwait
, will continue to work under new three-year contracts that provide an earn-out provision as an incentive. Other terms of the transaction, including its price, were not disclosed.
"Our clients will benefit tremendously," said Cowperthwait in commenting about the deal. "By joining Victory, our team gains the commitment, investment resources and stability of a larger firm with a long history of success. This means more support in every area of our business -- research, operations, sales and client service."
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