David Brown, chairman and co-CEO of Victory Capital, will become CEO at the firm, and Christopher Ohmacht, co-CEO, will become president, according to a joint news release from Victory Capital and New York-based Crestview.
Messrs. Brown and Ohmacht will be appointed to the company's new board of directors along with two representatives from Crestview and three independent directors.
The money management firm, which runs a total of $22.1 billion in equity and fixed income, will retain its brand and home base in Cleveland.
Further terms of the deal were not disclosed.
“We view it as a partnership with Crestview,” Mr. Ohmacht said in a telephone interview Feb. 21. “Employees will own a meaningful stake at the outset and will grow to a more significant stake over time.”
Mr. Ohmacht said all members of Victory Capital's management team and its senior investment professionals will have an initial equity stake in the firm. No changes in the company's day-to-day operations are expected.
There was “not a specific trigger” that made the time right for the deal, Mr. Ohmacht said, adding the “timing was right” from the strategic priorities of KeyCorp and Victory Capital.
“We see a strong preference from our clients for independent investment management with private structures where there's greater stability,” Mr. Ohmacht said, adding that Crestview's ownership would not affect Victory Capital's investment management.
The deal includes Victory Capital Advisers, the broker-dealer affiliate that distributes mutual funds.
Morgan Stanley was KeyCorp's financial adviser for the deal. Victory Capital did not use outside financial advisers. Crestview would not disclose which firm had advised it on the deal.
After the deal closes, Victory Capital will become the fourth money management business in Crestview's portfolio. It acquired an 8% stake in FBR Capital Markets in 2006, a 17.4% equity stake in Martin Currie in 2007, and with Grail Partners a 90% stake in Munder Capital Management, also in 2007.