Victory Capital Management agreed to acquire derivative asset management specialist Harvest Volatility Management for $300 million, confirmed Terry Sullivan, chief financial officer of Victory Capital, in a conference call Monday.
The acquisition will be financed through a combination of debt, equity and cash, with a full earnout payable to the sellers being possible if Harvest yields at least 30% annual revenue growth for five years.
Harvest, which has $12 billion in assets under management, specializes in yield-enhancement overlay, risk reduction, alternative beta and absolute-return investment strategies. Upon completion of the deal, Victory Capital will have about $75 billion in firmwide AUM.
Harvest is Victory Capital's "10th investment franchise," said David C. Brown, chairman and CEO of Victory Capital, on the call. Harvest is expected to remain an independent brand and have investment autonomy under Victory Capital's affiliate model.
The acquisition is expected to close by the end of the first quarter of 2019 and is subject to regulatory approvals.
Victory Capital had $62.3 billion in assets under management as of June 30.
