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Rating:It's DoubleLine Vs. Victory In a $275MM Auction Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, August 17, 2015

It's DoubleLine Vs. Victory In a $275MM Auction

News summary by MFWire's editors

Jeffrey Gundlach and David Brown may be going head to head over an M&A deal, trying to buy the same mutual fund shop.

Jennifer Ablan and Jessica Toonkel of Reuters report Gundlach's DoubleLine Capital [profile] and Brown's Victory Capital Management [profile] are two of the bidders for Guardian's RS Investments [profile]. Per the wire service, the deal could be valued at up to $275 million and second round bids were due on Friday.

News that Guardian had put RS on the block broke at the end of June. Reuters names Morgan Stanley as Guardian's banker for the sale of 25-year-old, San Francisco-based RS.

That $275-million price max translates into 1.375 percent of RS' $20 billion in AUM (as of March 31).

Los Angeles-based DoubleLine has investment products of various stripes, though like its famous founder it is primarily known as a fixed income shop. Todd Rosenbluth of S&P Capital IQ points out to Reuters that buying RS would give DoubleLine a boost in equities investing, with established teams and products. DoubleLine has over $72 billion in AUM as of March 31. Private equity shop Oaktree backs DoubleLine as a minority shareholder, giving DoubleLine access to capital to do a deal.

Cleveland-based Victory also has private equity backers, Crestview Partners and Reverence Capital Partners, so it also has access to capital for dealmaking. And Victory has already made two acquisitions in the past year: it bought out Munder, which was also backed by Crestview, and Compass EMP, a smart beta mutual fund and ETF shop. As of June 30, Victory had about $35.7 billion in AUM, and it uses a multi-boutique model, with nine boutiques currently under its umbrella. 

Edited by: Neil Anderson, Managing Editor

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