Asset manager Victory Capital strikes $7 billion deal for First Eagle Investments (updated)
UPDATE 3-Asset manager Victory Capital strikes $7 billion deal for First Eagle Investments Adds details and background in paragraphs 6, 7, 11, 13 and 15
By Arasu Kannagi Basil and Pritam Biswas
Aug 26 (Reuters) - Victory Capital VCTR.O said on Wednesday it will acquire privately held First Eagle Investments from buyout firm Genstar Capital in a cash-and-stock deal valued at about $7 billion, as it moves closer to its target of managing $1 trillion in assets.
The deal underscores accelerating consolidation in the asset management industry as boardrooms increasingly push for a larger and global presence to attract investor cash.
"This transaction enriches Victory Capital's talent pool, gives us additional scale to invest even more in our overall platform, and amplifies our distribution depth and breadth in the U.S., as well as outside the U.S. through our strategic partnership with Amundi," Victory CEO David Brown said in a statement.
San Antonio-based Victory has made several buys in recent years, including the asset management arm of veterans-focused financial services provider USAA in 2019 and the U.S. arm of European asset manager Amundi AMUN.PA in 2025.
The First Eagle deal comes months after Victory abandoned a bidding war with Nelson Peltz's Trian Fund Management and General Catalyst to buy asset manager Janus Henderson.
New York-based First Eagle, which was founded in Europe in 1864, operates across equity, fixed income, alternative credit and multi-asset strategies. It managed roughly $222 billion in assets as of July 31 and has generated positive net flows in the last three years.
Buying First Eagle will also give Victory a foothold in the alternative credit business, which Brown said the firm has been evaluating for several years.
Victory will pay $4.4 billion in cash and $2 billion in shares. It will also assume $575 million of First Eagle's debt.
$1 TRILLION IN ASSETS GOAL
Victory, which traces its history back to 1894, has bulked up through more than half a dozen acquisitions since it was carved out of KeyCorp KEY.N in 2013.
The firm has set a goal of managing $1 trillion in assets, a target it expects to reach mainly through acquisitions. It managed $348.8 billion in assets as of July 31.
Victory's shares, which have gained about 787% since its 2018 listing, rose 5.6% on Wednesday.
A combination of Victory and First Eagle will create a scaled traditional asset manager with roughly $571 billion in assets and roughly $3.2 billion of annual revenue.
The deal positions Victory as one of the largest publicly traded traditional asset managers in the U.S. and will expand its distribution reach across channels.
The transaction is expected to close by the end of the first quarter of 2027 and is anticipated to boost 2027 adjusted earnings per share by approximately 35%.
Genstar will own roughly 14.6% of Victory on a fully diluted, as-converted basis following the deal.
PJT Partners and RBC Capital Markets advised Victory on the deal and UBS Investment Bank and BofA Securities advised First Eagle.
BofA Securities and RBC Capital Markets are the deal's financiers.
(Reporting by Arasu Kannagi Basil and Pritam Biswas in Bengaluru; Editing by Pooja Desai)