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Money Management

Victory Capital’s AUM rises 2.3% in quarter, 9.3% for year

Victory Capital Holdings reported assets under management of $62.3 billion as of June 30, up 2.3% from March 31 and up 9.3% from a year earlier, according to its earnings report released Tuesday.

Victory Capital became a public company through an initial public offering on Feb. 8.

The firm's mutual fund assets totaled $37.8 billion as of June 30, up 2.2% from the end of the previous quarter and up 4.7% from June 30, 2017. Exchange-traded funds AUM totaled $2.9 billion, up 8.7% from March 31 and up 84.2% from a year earlier.

Victory Capital's assets managed in separate accounts and other vehicles were up 1.6% in the quarter ended June 30 to $21.5 billion, up 1.6% from three months earlier and up 11.8% from a year earlier.

Across all investment vehicles, the firm experienced net outflows of $102 million in the quarter, compared to net outflows of $633 million in the previous quarter and net outflows of $601 million in the second quarter 2017.

Victory Capital's ETFs had positive net inflows of $200 million in the three months ended June 30 vs. net inflows of $452 million in the previous three-month period and net inflows of $278 million in the year-earlier quarter.

Mutual funds experienced net outflows of $153 million in the second quarter vs. net outflows of $640 million in the first quarter and net outflows of $70 million in second quarter 2017.Separate accounts/other vehicles had net outflows of $149 million in the quarter ended June 30 vs. net outflows of $445 million in the previous quarter and net outflows of $809 million in the second quarter 2017.

David Brown, Victory Capital's chairman and CEO, attributed growth in the firm's AUM in the latest quarter to an "improving flow picture and positive market action," but noted "we continued to experience somewhat elevated levels of client rebalancing activity," according to the earnings report.

"Sales momentum in our VictoryShares ETFs remained strong … our ETFs have experienced positive net flows every quarter — and in 37 of the 38 months – since we entered the ETF business via the (Compass Efficient Model Portfolios) acquisition in April 2015," Mr. Brown added.

Victory Capital's revenue was $104.4 million in the quarter ended June 30, compared to $105 million the previous quarter and $100.9 million a year earlier. Net income was $18.7 million in the quarter, up from $10.5 million in the previous quarter and $2.4 million in second quarter 2017.