Victory Capital adds to ETF capabilities with WestEnd Advisors acquisition

Victory Capital will acquire WestEnd Advisors, which provides turnkey, core model allocation strategies to financial advisers, in a deal expected to close by the end of the year, confirmed spokeswoman Tricia Ross in an email on Thursday.

Victory will acquire a 100% of WestEnd for $480 million with deferred earnout payments over time dependent on meeting revenue targets.

WestEnd manages $18 billion in core model allocation strategies for financial advisers, including four primary ETFs and one large-cap core strategy offered in tax-efficient separately managed accounts.

WestEnd is Victory's 12th investment franchise and will continue to operate autonomously under its own name from its headquarters in Charlotte, N.C., Ms. Ross said.

"WestEnd is well positioned to continue benefiting from multiple secular industry tailwinds including the use of ETFs as cost-effective investment-delivery vehicles, increasing adoption of model portfolios by financial intermediaries and the move by a growing number of financial advisers to fee-based revenue models," said David Brown, Victory Capital's chairman and CEO, in a news release.

Mr. Brown said WestEnd generated $3.5 billion, or 30%, of net-organic asset growth in the first three quarters of 2021.

Victory Capital has "the requisite scale and well-established distribution network to be additive to our existing distribution activities and should serve as a catalyst for future growth," said Michael Goldman, WestEnd's managing partner, in Victory's release.

Victory Capital managed $159.9 billion as of Sept. 30, including $4.4 billion in ETFs, according to its earnings release Thursday.