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Rating:A $61.8B-AUM Fund Firm Prepares to IPO Not Rated 4.0 Email Routing List Email & Route  Print Print
Friday, January 12, 2018

A $61.8B-AUM Fund Firm Prepares to IPO

by: Kenny He

Dave Brown, CEO of Cleveland Ohio-based Victory Capital [profile], is taking the multiboutique public.

David C. Brown
Victory Capital
Chairman and CEO
According to the S-1 filed yesterday, Victory Capital's partial IPO is expected to raise up to $100 million through issuing class A shares. (Class A shares each get one vote, while class B shares each get ten votes.) Victory Capital intends to use the proceeds from the offering to pay down and refinance debt.

Asset manager valuations often range from one to four percent of AUM. Victory had $61.8 billion in AUM as of December 31, 2017, so the rule of thumb implies that it's worth between $618 million and $2.472 billion. 83 percent of their asset mix leans towards equity, including 71 percent in small, mid or large cap equities.

Crestview Partners, the private equity firm that helped Victory spin out of KeyCorp in 2013 in a $246-million deal, will continue to control a majority of the voting rights after the IPO. (That 2013 price tag translated into 1.11 percent of Victory's AUM at the time.) Meanwhile, 70 percent of Victory Capital employees own approximately 29 percent of the company's shares as of September 30, 2017.

JP Morgan, Barclays, BofA Merrill Lynch, Goldman Sachs & Co. LLC, Morgan Stanley, RBC Capital Markets, Keefe, Bruyette & Woods, Inc., and William Blair & Company, LLC. are all underwriters involved in the IPO process.

With Crestview's help, Victory has been acquisitive since leaving the KeyCorp family five years ago. Victory bought Munder, another Crestview-backed asset manager, in 2014, adding on $18.1 billion in AUM across small- and mid-cap equities. Victory then bought Compass Efficient Model Portfolios in 2015, adding solutions- driven products and ETF capabilities. And in 2016 Victory acquired RS Investments, adding on $16.7 billion in AUM across small cap, mid-cap and emerging markets equities and niche fixed income products.  

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