Acquisitions fuel revenue and profits rise at Victory Capital Holdings of San Antonio in 2021

San Antonio-based asset management company Victory Capital Holdings Inc. recorded another year of record revenues and profits, fueled by acquisitions.

It posted a net profit of $278.4 million last year, an increase of about $66 million or 31%, from $212.5 million the previous year. Per share, it earned $3.75 last year versus $2.88 in 2020.

“2021 has been a transformative year for Victory Capital in many ways,” Chief Executive Officer David Brown told analysts on a Friday conference call, citing two investment franchises it acquired in the fourth quarter.

In March, Victory completed the acquisition of THB Asset Management.

“We are excited about the prospects for each of these newly added investment franchises to contribute meaningfully to organic (internal) growth in 2022 and beyond,” Brown said.

Victory remains on the lookout for additional offers.

“We will continue to focus on acquisitions that will make our business better and more competitive,” Brown said. “We are currently in a number of discussions which are at different stages of the process. We are patient, but ready immediately if the right opportunity arises.

Victory moved its headquarters to San Antonio from Ohio after buying USAA Asset Management Co. from the San Antonio financial services company in 2019. The transaction, Victory’s largest, was valued at approximately $950 million. and included 47 mutual funds, six exchange-traded funds and one college savings plan.

Victory ended the year with approximately $183.7 billion in assets under management, up nearly 25% from $147.2 billion at the end of 2020.

One analyst speculated that at least one of the large outflows was tied to the USAA Income Fund.

“We’re not going to get into the specifics of where the two exits were,” Brown said. “We don’t give that level of detail.”

Victory’s assets under management fell to $176.8 billion at the end of January, but Brown said its net flow was positive for the year on Friday morning.

“We have a ton of momentum in ’22,” he said.

In November, Victory shareholders voted to eliminate its dual-class share structure. The change positions stocks for inclusion in major stock indexes, which she says will drive buying by index mutual funds. If that happens, it could push Victory’s stock price higher.

On San Antonio asset management firm Victory Capital acquires its first alternative investment franchise

The shares rose more than 4% to $36.62 in early trading on Friday.

For the fourth quarter, Victory earned $69.7 million, or 94 cents per share, on revenue of $229.1 million. That compares to net income of $54.9 million, or 75 cents per share, on $200.4 billion in revenue during the same period in 2020.

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Sallie R. Loera