Amundi US to merge into Victory Capital

PARIS: Amundi and Victory Capital have signed a Memorandum of Understanding that will significantly reshape the investment management landscape. The agreement outlines a strategic plan to merge Amundi US into Victory Capital, granting Amundi a 26.1% stake in Victory Capital and establishing comprehensive global distribution agreements.

This proposed transaction is poised to create a more extensive investment platform in the United States, offering clients from both firms a wider array of asset classes and investment strategies. These include actively managed fixed income, equity, and multi-asset strategies available through various vehicles such as separately managed accounts, ETFs, mutual funds, UCITs, collective investment trusts, and model portfolios.

Victory Capital, a rapidly growing and diversified asset management firm based in the US, manages $175 billion in client assets and boasts a robust acquisition history. The company’s unique platform maintains the independence of its investment teams while benefiting from a centralized operating and distribution framework.

Amundi US, managing $104 billion in assets, offers a diverse range of investment capabilities, including US and global equity, fixed income, and multi-asset strategies for a global clientele. The integration of Amundi US into Victory Capital will significantly enhance the latter’s scale, diversify its investment capabilities, and expand its global client base.

Under the terms of the proposed transaction:

  • Amundi US will merge into Victory Capital in exchange for a 26.1% economic interest in Victory Capital, with Amundi becoming a key strategic shareholder.
  • Two Amundi representatives will join the Victory Capital Board of Directors upon closing the transaction.
  • The parties will enter into 15-year reciprocal distribution agreements.

These distribution agreements will enable:

  • Amundi to distribute Victory Capital’s investment offerings outside the US, leveraging Amundi’s extensive global client base.
  • Victory Capital to distribute Amundi’s non-US products in the US market, expanding Amundi’s distribution reach and offering Victory Capital’s clients a broader range of investment options.

The strategic alliance is designed to further the goals of both parties, allowing Amundi to strengthen its presence in the US market and Victory Capital to extend its platform with the addition of its largest Investment Franchise. This move will enable Victory Capital to offer combined strategies to non-US clients through Amundi’s global distribution network, providing clients with an expanded suite of US and international investment capabilities.

Valérie Baudson, Chief Executive Officer of Amundi, commented: “The proposed transaction with Victory Capital is a unique opportunity to strengthen our presence in the US, while becoming a strategic shareholder in a reputable US based asset management firm with an excellent track record of growth. It would expand our access to top-performing US investment strategies for the benefit of our clients globally.

Additionally, Amundi would greatly benefit from expanded distribution strength in the US market. The combination would provide a significant catalyst for growth for Amundi. Overall, this is a compelling proposition for our clients and our employees; it would also be a value-creating deal for our shareholders with significant prospects for both revenue growth and synergies.”

David Brown, Chairman and Chief Executive Officer of Victory Capital, added: “This transaction would benefit the clients, employees, and shareholders of both organizations. 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.

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.”

As contemplated, the transaction is expected to be accretive for the shareholders of both Victory Capital and Amundi, increasing adjusted net income and earnings per share for both companies.

The parties are working toward definitive agreement, which is expected to be announced by the end of the second quarter.

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