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Money Management

Victory Capital AUM drops 17% for quarter; CFO to leave

Victory Capital Holdings on Wednesday reported $52.8 billion in assets under management as Dec. 31, down 17% from three months earlier and down 15% from a year earlier.

Mutual fund assets totaled $30.5 billion as of the end of the fourth quarter, down 20% from the end of the previous quarter and down 19.7% from the end of the year-earlier quarter. Exchange-traded fund assets totaled $3 billion, down 10% from Sept. 30 but up 31% from Dec. 31, 2017.

Assets managed in separate accounts and other vehicles totaled $19.3 billion as of Dec. 31, down 12.8% from three months earlier and down 10.4% from a year earlier.

Net outflows were $1 billion for the fourth quarter, compared to net outflows of $672 million in the third quarter and net inflows of $294 million in the fourth quarter of 2017.

David C. Brown, chairman and CEO of Victory Capital, said in an earnings release statement that the firm's AUM decline was "due primarily to market depreciation." Mr. Brown said the net outflows came as "investors retreated from higher-risk asset classes and rotated into cash."

Victory Capital's mutual funds saw net outflows of $1.5 billion in the fourth quarter vs. net outflows of $852 million in the third quarter and net outflows of $857 million in the fourth quarter of 2017.

Across its ETFs, the firm had net inflows of $121 million during the three months ended Dec. 30, compared to net inflows of $287 million in the prior quarter. ETFs saw $262 million in net inflows in the year-earlier quarter.

Separate accounts and other vehicles had net inflows of $367 million in the quarter ended Dec. 30 vs. net outflows of $107 million in the third quarter and net inflows of $889 million in the fourth quarter of 2017.

Victory Capital's revenue was $96 million in the fourth quarter, compared to $108.1 million in the previous quarter, and $105.6 million in the year-earlier quarter. Net income was $13.9 million compared to $20.6 million in the third quarter and $11.2 million in the fourth quarter of 2017.

Separately on Wednesday, the firm announced that Terence Sullivan, chief financial officer and head of strategy of Victory Capital, will be leaving the company effective March 1, "to assume a leadership position at a diversified financial services firm located closer to his home," a news release said.

Michael Policarpo was named president, CFO and chief administrative officer. Mr. Policarpo, who is currently chief operating officer, has worked at Victory Capital for 14 years, according to the news release.

The president and chief administrative officer positions are new, according to a spokeswoman, who declined to comment further on who would assume the chief operating officer and head of strategy titles under the changes.

However, according to a Form 8-K filing, Mr. Policarpo will oversee the company's operations and administrative functions.