Victory Capital’s Acquisition of USAA Asset Management Company

Willkie represented Victory Capital Holdings, Inc. on the deal

Victory Capital Holdings, Inc. (NASDAQ:VCTR) has entered into a definitive purchase agreement to acquire USAA Asset Management Company. As of September 30, 2018, USAA Asset Management Company had $69.2 billion in assets under management (AUM) in 53 investment funds. Based on AUM as of September 30, 2018, Victory Capital would have approximately $144.4 billion in firmwide AUM1 at the close of the transaction.

USAA Asset Management Company, based in San Antonio, Texas, was formed to serve the investment needs of the military community and their families. Today, it is a leading investment firm with a full suite of investment capabilities, a strong investment performance track record and a distinguished reputation for service to its members. Barron’s named USAA Asset Management the 12th Best Fund Family of 2016 and the 23rd Best Fund Family of 2017. It was also ranked 3rd in the taxable bond category for 2016 and 5th for 2017.

USAA Asset Management Company will become Victory Capital’s 11th Investment Franchise and it will have the rights to offer products and services using the USAA brand. As part of Victory Capital, USAA’s investment teams will continue serving the investment needs of the military community and their families by employing the disciplined investment processes that they have used in the past.

The acquisition of USAA Asset Management Company represents a substantial expansion and diversification of Victory Capital’s investment platform, particularly in the fixed income and solutions asset classes. Victory Capital will extend its Solutions Platform to include target date and target risk strategies, managed volatility mutual funds and active fixed income ETFs. It will also add to its lineup of asset allocation portfolios and smart beta equity ETFs. USAA Asset Management Company also offers sub-advised and multi-manager equity funds that will expand the choices for Victory Capital clients. Based on AUM on September 30, 2018, Victory Capital’s AUM by asset class pro forma for the acquisition would be 48% equities, 26% solutions, 19% fixed income and 7% money market.

The transaction also provides a new and unique opportunity for Victory Capital to offer its products to USAA members through a direct member-based channel with attractive organic growth and retention rates. USAA mutual funds have experienced an average 10-year organic growth rate of 3.4% compared with 1.1% for their active manager peers.

Willkie represented Victory Capital Holdings, Inc. with a team including David Boston (Picture) and counsel Daniel Mun, partners Jeffrey Goldfarb, Geri Anne McEvoy and James Silk.

Involved fees earner: David Boston – Willkie Farr & Gallagher; Daniel Mun – Willkie Farr & Gallagher; Jeffrey Goldfarb – Willkie Farr & Gallagher; Geri Anne McEvoy – Willkie Farr & Gallagher; James Silk – Willkie Farr & Gallagher;

Law Firms: Willkie Farr & Gallagher;

Clients: Victory Capital Management Inc.;

Author: Ambrogio Visconti