Victory Capital Holdings agreed to acquire THB Asset Management, a Norwalk, Conn.-based equity manager with $435 million in assets under management, Victory announced Wednesday afternoon.
The transaction is expected to close in early 2021, said a news release on the deal.
Victory Capital, which is headquartered in San Antonio, on Wednesday also reported its third-quarter earnings and saw its total assets under management increase 2.8% to $132.7 billion as of Sept. 30 compared with its AUM as of June 30. The rise in total assets over the quarter was attributable to "positive market action of $6.6 billion, partially offset by net outflows of $3 billion," an earnings release said.
Victory's firmwide AUM decreased 9% over the year ended Sept. 30.
Firmwide net outflows were $3 billion during the third quarter, compared with net outflows of $11.9 billion during the three months ended June 30. In the year-earlier quarter, the firm had net inflows of $661 million, according to the earnings release.
The company's revenue was $188.7 million during the three months ended Sept 30, up 3.7% from the second quarter and down 12.2% from the year-earlier quarter. The revenue decrease over the year was primarily due to lower average AUM at the firm during the period, the release said.
Regarding Victory Capital's acquisition of THB Asset Management, Victory Chairman and CEO David Brown said in a statement: "THB has a 38-year history with an impressive investment performance track record. All of its strategies have consistently outperformed respective benchmarks throughout various market cycles and rank among the top tier of their strategy peer groups."
THB's $435 million in assets is across microcap, small-cap and midcap equity asset classes, including U.S., global and international strategies, Mr. Brown added.
"These are capacity-constrained asset classes that we know well, and THB has ample room for AUM growth across its product set. Aligning with our responsible investing initiatives, all of THB's strategies have ESG considerations fully integrated into their investment processes," Mr. Brown said. "In addition to serving clients in the U.S., THB has a distribution footprint in Australia and Europe, and provides us with expanded opportunities in regions in which we have limited presence today."
Moving forward, Victory Capital continues to look for "larger scale transactions that enhance our existing model," Mr. Brown said in the statement.
The firm will hold an earnings call Thursday morning to discuss its third-quarter results.
