Victory Capital to reach $12B in AUM with Harvest acquisition

Victory Capital is set to acquire New York’s Harvest Volatility Management LLC, which had approximately $12 billion in assets under management as of July 31, 2018. Harvest specializes in yield enhancement overlay, risk reduction, alternative beta and absolute return investment strategies. Victory Capital would, on the closing of the transaction, have approximately $75 billion in firm-wide assets under management. This includes approximately $16 billion, or 21 percent of total AUM, in its Solutions Platform strategies. Harvest, which specializes in yield enhancement overlay, risk reduction, alternative beta and absolute return investment strategies, will remain an independent brand post acquisition. "Harvest offers a cutting-edge suite of strategies that are designed to provide investors with risk-managed sources of income, absolute return and varying levels of market exposure," said David Brown, chairman and CEO of Victory Capital, in a statement. "The addition of Harvest as our 10th investment franchise aligns squarely with our stated acquisition strategy. The firm is a strong organic grower with highly specialized investment capabilities, which are outcome-oriented, highly customizable and address a specific need in client portfolios." Following the acquisition, Harvest's senior management will be meaningful equity investors in Victory Capital. They also will continue to be significant investors in the strategies that they manage. The transaction, which is expected to be accretive to earnings per share, will be financed through a combination of debt, equity and cash on the balance sheet, with the potential for an earn-out, payable to the sellers, over time if certain growth objectives are met. The acquisition is expected to close by the end of the first quarter of 2019, and is subject to regulatory and other customary approvals, conditions and consents, including approval by Harvest's clients.