MutualFundWire.com: Victory, Virtus, Franklin, and Voya Each Seal Deals
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Wednesday, January 05, 2022

Victory, Virtus, Franklin, and Voya Each Seal Deals


A quartet of publicly traded asset management players — Franklin Templeton, Victory, Virtus, and Voya — have each wrapped up new acquisitions in the space.

George Robert Aylward
Virtus Investment Partners, Inc.
President, CEO
On Monday, Dave Brown, chairman and CEO of Victory Capital Holdings, Inc., confirmed that on Friday, December 31, the San Antonio, Texas-based multi-boutique closed on its planned acquisition of 100 percent of Charlotte, North Carolina-based WestEnd Advisors. The deal was first unveiled back in November and comes with a $480-million price tag up front, plus an earnout based on revenue growth targets. (Brown notes that this was Victory's third deal in 2021.)

WestEnd, an ETF strategist that offers SMAs, is Victory's 12th "investment franchise" (what the Victory team calls their boutiques). Prior to the deal, it was principally owned by several of its employees. They work with about $18 billion in assets. As of November 30, Victory had $160.5 billion in AUM.

"We are looking forward to deepening WestEnd's penetration on existing platforms and introducing them to new financial intermediaries and platforms where we have long-standing relationships," Brown states.

Also on Monday, George Aylward, president and CEO of Virtus Investment Partners, Inc., confirmed that the Hartford, Connecticut-based multi-boutique has closed on its planned acquisition of 100 percent of New York City-based Stone Harbor Investment Partners LP. The deal was first unveiled last June, and the pricing and terms were not publicly disclosed. Yet Jim Craige (co-chief investment officer and head of emerging markets at Stone Harbor), Dave Torchia (head of multi-asset credit), Peter Wilby (managing partner and co-CIO), and key Stone Harbor folks have long-term employment agreements and are expected to stay on. Broadhaven Capital Partners advised Virtus on the deal, while RBC Capital Markets, LLC advised Stone Harbor. In terms of legal counsel, Goodwin Procter LLP supported Virtus, while Morgan Lewis and Bockius LLP supported Stone Harbor.

16-year-old Stone Harbor is a fixed income asset manager, with a particular focus on emerging markets debt. They primarily work with global institutional clients, though they also offer mutual funds (both open-end and closed-end). As of November 30, Stone Harbor had $14.5 billion in AUM, and Virtus had $184.5 billion.

"Their institutional-quality emerging markets debt capabilities ... are well-respected among clients and consultants and highly complementary to our other fixed-income capabilities," Aylward states.

Yesterday, Roger Paradiso, head of product solutions at Franklin Resources, Inc. (dba Franklin Templeton), confirmed that the San Mateo, California-based asset manager has closed on its planned acquisition of Stamford, Connecticut-based O'Shaughnessy Asset Management, LLC (OSAM). The deal was first unveiled last September. OSAM was principally owned by 13 partners.

OSAM is a quant shop that offers one mutual fund, SMAs, and a custom indexing platform called Canvas. As of November 30, OSAM had $6.5 billion in AUM (including more than $2 billion in Canvas, which debuted in late 2019), and Franklin had more than $1.5 trillion in AUM.

"Custom indexing is aligned with our commitment to bringing sophisticated customization to a broader investment audience," Paradiso states. "This partnership enhances our ability to deliver compelling individualized SMA solutions to clients, advisors and firms."

OSAM's team of more than people has joined Franklin, and they're keeping the OSAM brand (which is now part of Franklin Templeton's product solutions division).

"Our partnership with Franklin Templeton will be a catalyst for continued innovation particularly within Custom Indexing, which we believe is an area of significant opportunity and growth," states Patrick O'Shaughnessy, CEO of OSAM.

Also on Monday, Christine Hurtsellers, CEO of Voya Financial, Inc.'s Voya Investment Management arm, confirmed that the New York City-based firm has closed on its planned acquisition of assets of Portland, Oregon-based Tygh Capital Management. The deal was first unveiled last November, and pricing and terms were not publicly disclosed. (Though the price tag was not expected to be financially material to Voya.) TCM's principal owners were co-founders Richard Johnson and Jeff Curtis.

TCM specializes in small and smid cap growth investing. Their flagship, $529 million-AUM (as of December 31) small cap growth fund will be transformed into a new Voya mutual fund in Q2 2022, pending shareholder approval. Meanwhile, the Voya IM folks confirm that the whole TCM team has joined Voya IM, with TCM's investment team staying in Portland and joining Voya's equities investment platform. Voya IM had more than $230 billion in AUM as of September 30.

"I'd like to welcome the entire TCM team to Voya," Hurtsellers states. "Their investment skills and client-focused approach will enable our clients to reach their next-level of investment success."


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