Asset managers propose strategic partnership to expand US, global distribution
The proposal involves a Texas firm and the US operation of a European asset manager.
Two asset management firms – one in Texas and one headquartered in Paris, France – have agreed a strategic partnership that will add scale to the firms’ U.S. and global distribution operations.
The memorandum of understanding signed by leading European asset manager Amundi and San Antonio-based Victory Capital will see Amundi U.S. combined into Victory Capital, broadening the investment platform for clients of both firms which include individuals and institutions, and being accretive for shareholders.
The offering would expand the range of asset classes for the two groups of clients to include actively managed fixed income, equity, and multi-asset investment strategies. A range of investment vehicles would be available including separately managed accounts, ETFs, mutual funds, UCITs, collective investment trusts, and model portfolios.
The scale of the two businesses is reflected in their AUM, with Amundi U.S. currently responsible for $104 billion of its parent firm’s $2 trillion, while Victory Capital manages $175 billion.
If the non-binding MOA leads to a definitive agreement, which the two firms hope will happen by the end of the second quarter, it is expected to include 15-year reciprocal distribution agreements. Victory Capital would offer Amundi’s non-U.S. manufactured products in the U.S. while Amundi would distribute Victory Capital’s investment offering outside the U.S.
The intention is that Amundi U.S. would be combined into Victory Capital in exchange for a 26.1% economic stake for Amundi in Victory Capital, with no cash payment involved. Amundi would become a strategic shareholder of Victory Capital with two of its representatives joining the Victory Capital Board of Directors when the transaction closes.
CATALYST FOR GROWTH
“The proposed transaction with Victory Capital is a unique opportunity to strengthen our presence in the U.S., while becoming a strategic shareholder in a reputable U.S. based asset management firm with an excellent track record of growth,” said Valérie Baudson, Amundi’s CEO. “It would expand our access to top-performing U.S. investment strategies for the benefit of our clients globally. Additionally, Amundi would greatly benefit from expanded distribution strength in the U.S. market. The combination would provide a significant catalyst for growth for Amundi.”
David Brown, chairman and CEO of Victory Capital, added that the strategic partnership would be good for both firms’ clients, employees, and shareholders.
“Strategically, bringing the Amundi U.S. business on to our platform increases our size and scale, adds new investment capabilities, and further strengthens our U.S. distribution with the addition of new talent and relationships,” he said. “At the same time, the distribution agreement would immediately position our products for success through Amundi’s extensive and effective distribution channels throughout the world. Financially, the transaction would create shareholder value, be accretive to earnings, and increase our financial flexibility. Moreover, having Amundi as a strategic shareholder in our firm would strengthen our alignment on the distribution agreement and establish the foundation for an enduring and mutually beneficial long-term relationship.”
Any agreement will be subject to conditions including regulatory approvals.
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