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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): September 24, 2018
Victory Capital Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware |
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001-38388 |
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32-0402956 |
(State or Other Jurisdiction |
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(Commission |
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(IRS Employer |
of Incorporation) |
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File Number) |
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Identification Number) |
4900 Tiedeman Road, 4th Floor; Brooklyn, OH |
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44144 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code: (216) 898-2400
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
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Item 8.01. Other Events
On September 24, 2018, Victory Capital Holdings, Inc. issued a press release announcing its execution of a definitive agreement to acquire Harvest Volatility Management, LLC. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
d) Exhibits. The following exhibits are filed herewith:
Exhibit |
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Description |
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99.1 |
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Press Release, dated September 24, 2018, issued by Victory Capital Holdings, Inc. |
EXHIBIT INDEX
Exhibit |
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Description |
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99.1 |
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Press Release, dated September 24, 2018, issued by Victory Capital Holdings, Inc. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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VICTORY CAPITAL HOLDINGS, INC. | ||
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Dated: September 24, 2018 |
By: |
/s/ David C. Brown |
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Name: David C. Brown | |
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Title: Chief Executive Officer and Chairman |
NEWS RELEASE |
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VICTORY CAPITAL TO ACQUIRE HARVEST VOLATILITY MANAGEMENT
Further Diversifies Platform and Expands Solutions Capabilities
Cleveland, Ohio, September 24, 2018 Victory Capital (NASDAQ:VCTR) (the Company) today announced that it has entered into a definitive purchase agreement to acquire Harvest Volatility Management, LLC (Harvest). Harvest, which had approximately $12 billion in assets under management (AUM) as of July 31, 2018, is a leader in derivative asset management, specializing in yield enhancement overlay, risk reduction, alternative beta and absolute return investment strategies. Based on AUM for both firms as of July 31, 2018, Victory Capital would on the closing of the transaction have approximately $75 billion in firmwide AUM. This includes approximately $16 billion, or 21% of total AUM, in its Solutions Platform strategies.
Harvest, which is based in New York City, was founded in 2008 by Chief Executive Officer and Portfolio Manager Richard L. Selvala, Jr. and Managing Partner and Chief Risk Officer Curtis F. Brockelman, Jr. Harvest has established a strong track record in managing strategies that enhance yield and reduce asset class risk exposures. Client demand for the firms strategies has been strong, resulting in meaningful growth in AUM since the firms inception. Harvest was recently named 2017 Overlay Manager of the Year by EQDerivatives.
Victory Capitals integrated multi-boutique business model will enable Harvest to continue to employ its structured and disciplined investment process while remaining an independent brand. Harvests seasoned investment team will continue to leverage its proprietary technology platform, which supports its analytic, trading and risk management functions.
Harvest offers a cutting-edge suite of strategies that are designed to provide investors with risk-managed sources of income, absolute return and varying levels of market exposure, said David Brown, Chairman and Chief Executive Officer of Victory Capital. The addition of Harvest as our 10th Investment Franchise aligns squarely with our stated acquisition strategy. The firm is a strong organic grower with highly specialized investment capabilities, which are outcome-oriented, highly customizable and address a specific need in client portfolios.
We are excited to become part of Victory Capitals platform, with its substantial operational resources, highly complementary distribution network, and track record of supporting boutique investment firms, said Mr. Selvala. As always, our team will continue to seek to generate attractive risk-adjusted returns for our clients.
Victory Capital and Harvest are both committed to employee ownership as a means to ensure alignment with current and future clients. Following the acquisition, Harvests senior management will be meaningful equity investors in Victory Capital. They also will continue to be significant investors in the strategies that they manage.
Mr. Brockelman added, Harvest and Victory Capital share a strong entrepreneurial culture and commitment to technology and product innovation. We look forward to leveraging the Victory Capital teams expertise and capabilities as we evaluate attractive opportunities and solutions for our clients.
The transaction, which is expected to be accretive to earnings per share, will be financed through a combination of debt, equity and cash on the balance sheet, with the potential for an earn-out, payable to the sellers, over time if certain growth objectives are met. The acquisition is expected to close by the end of the first quarter of 2019, and is subject to regulatory and other customary approvals, conditions and consents, including approval by Harvests clients.
Investor Conference Call
Victory Capital will host a conference call and webcast at 10:00 a.m. Eastern Time today, September 24, 2018, to discuss this transaction. The call can be accessed via telephone at 866-465-5145 (domestic) or 409-220-9945 (international). Please reference the Victory Capital Conference Call.
A recorded replay of the conference call will be available shortly after the conclusion of the live call and can be accessed through October 8, 2018 by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international), and entering the Conference ID Number 3198266.
The slide presentation and webcast of the conference call can be accessed on the Events and Presentations page of Victory Capitals investor relations website at https://ir.vcm.com.
RBC Capital Markets and Barclays Capital lnc. served as financial advisors and Willkie Farr & Gallagher LLP acted as legal advisor to Victory Capital in this transaction. Seward & Kissel LLP acted as legal advisor to Harvest Volatility Management, LLC.
About Victory Capital
Victory Capital is a global investment management firm operating a next-generation, integrated multi-boutique business model with $63.2 billion in assets under management as of July 31, 2018.
Victory Capitals differentiated model is comprised of nine Investment Franchises, each with an independent culture and investment approach. Additionally, the Company offers a rules-based Solutions Platform, featuring the VictoryShares ETF brand, as well as custom and multi-asset class solutions. The Companys Investment Franchises and Solutions Platform are supported by a centralized distribution, marketing and operational environment, in which our investment professionals can focus on the pursuit of investment excellence.
Victory Capital provides institutions, financial advisors and retirement platforms with a variety of asset classes and investment vehicles, including separately managed accounts, collective trusts, mutual funds, ETFs, UCITs and UMA/SMA vehicles.
For more information, please visit www.vcm.com.
About Harvest Volatility Management
Founded in 2008, Harvest Volatility Management is one of the worlds leading derivative asset management firms with approximately $12 billion in assets under management as of July 31, 2018. Harvest is comprised of an expert team with many decades of experience advising on, structuring, and managing volatility and option related strategies. To learn more about the firm, please visit www.hvm.com.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include, without limitation, any statements preceded by, followed by or including words such as target, believe, expect, aim, intend, may, anticipate, assume, budget, continue, estimate, future, objective, outlook, plan, potential, predict, project, will, can have, likely, should, would, could and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Victory Capitals control, as discussed in Victory Capitals filings with the SEC, that could cause Victory Capitals actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements.
Although it is not possible to identify all such risks and factors, they include, among others, the following: reductions in AUM based on investment performance, client withdrawals, difficult market conditions and other factors; the nature of the Companys contracts and investment advisory agreements; the Companys ability to maintain historical returns and sustain its historical growth; the Companys dependence on third parties to market its strategies and provide products or services for the operation of its business; the Companys ability to retain key investment professionals or members of its senior management team; the Companys reliance on the technology systems supporting its operations; the Companys ability to successfully acquire and integrate new companies; the concentration of the Companys investments in long-only small- and mid-cap equity and U.S. clients; risks and uncertainties associated with non-U.S. investments; the Companys efforts to establish and develop new teams and strategies; the ability of the Companys investment teams to identify appropriate investment opportunities; the Companys ability to limit employee misconduct; the Companys ability to meet the guidelines set by its clients; the Companys exposure to potential litigation (including administrative or tax proceedings) or regulatory actions; the Companys ability to implement effective information and cyber security policies, procedures and capabilities; the Companys substantial indebtedness; the potential impairment of the Companys goodwill and intangible assets; disruption to the operations of third parties whose functions are integral to the Companys ETF platform; the Companys determination that Victory Capital is not required to register as an investment company under the 1940 Act; the fluctuation of the Companys expenses; the Companys ability to respond to recent trends in the investment management industry; the level of regulation on investment management firms and the Companys ability to respond to regulatory developments; the competitiveness of the investment management industry; the dual class structure of the Companys common stock; the level of control over the Company retained by Crestview GP; the Companys status as an emerging growth company and a controlled company; and other risks and factors listed elsewhere in the Companys filings with the SEC.
Such forward-looking statements are based on numerous assumptions regarding Victory Capitals present and future business strategies and the environment in which it will operate in the future. Any forward-looking statement made in this press release speaks only as of the date hereof. Except as required by law, Victory Capital assumes no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.
INVESTOR RELATIONS WEBSITE
Victory Capital may use the Investor Relations section of its website, https://ir.vcm.com, to disclose material information to investors and the marketplace as a means of disclosing material, non-public information and for complying with disclosure obligations under Regulation Fair Disclosure (Reg FD). Victory Capital encourages investors, the media and other interested parties to visit its investor relations website regularly.
Contacts
Investors:
Lauren Crawford, 310-622-8239
lcrawford@finprofiles.com
Media:
For Victory Capital:
Tricia Ross, 310-622-8226
tross@finprofiles.com
For Harvest:
Gasthalter & Co.
Jonathan Gasthalter/Kevin FitzGerald
(212) 257-4170