Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Victory Squeezes More Out of the USAA Deal Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, May 16, 2019

Victory Squeezes More Out of the USAA Deal

Reported by Neil Anderson, Managing Editor

Dave Brown and his team are squeezing an extra $10 million in cost savings out of their biggest merger yet.

David C. Brown
Victory Capital Holdings, Inc.
Chairman, CEO
Yesterday morning, on Victory Capital Holdings' Q1 2019 earnings call with analysts (as transcribed by Seeking Alpha), Brown confirmed that the publicly traded, multi-boutique asset manager is on track to close on its planned acquisition of USAA Asset Management Company on July 1, as expected. Brown also revealed that the shareholder approval process for USAA's mutual funds and ETFs is now complete. And he revealed that they've boosted their expected savings from the pending deal.

"We've increased our cost synergy estimates from $100 million to $110 million," Brown said on the call. "We now expect $60 million of synergies to be in place at close, up from the original estimate of $42 million. $95 million of synergies are expected with the six months of close, up from $83 million. The full $110 million is expected to be in place within 12 to 15 months of close."

Consistent with initial expectations, Brown also still sees one-time integration costs amounting to $50 million. (Cleveland-based Victory will be moving to a new headquarters in San Antonio, USAA's hometown.)

In response to a question from Ryan Aceto, a senior equity research associate at FBR, Brown clarified that the extra cost savings will come "across a few broad buckets," including back- and middle-office and more.

"We'll have some sub-advisers that we are taking in-house and changing," Brown said. "And then there is also just the power of the integrated model that will get some scale across administrative functions."

In terms of personnel changes from the deal, the Victory team initially expected to keep on more than 300 USAA employees. Yesterday Brown confirmed that "50 key USAA investment professionals" will stay on-board, as will 50 people for the USAA direct channel call center.

"Additionally, our outsourcing partners have retained 120 USAA employees, who will be dedicated to member services and back office functions," Brown said.

As always, Brown also talked on the call about Victory's deal pipeline, this time in response to questions from Chris Shutler, an equity research analyst at William Blair, and Kenneth Lee, vice president and senior equity analyst at RBC.

"We still feel like the industry is just starting to begin to consolidate. And we think that's going to accelerate our platform, again, as we have discussions and conversations with lots of different potential partners," Brown said. "The pace and the cadence that we have done deals in the past will continue, if not accelerate."

Tuesday afternoon, after the market closed, the Victory team reported $0.35 per diluted share of adjusted earnings with tax benefit, missing expectations by $0.01, and revenue of $87.5 million, missing estimates by $3.4 million. Victory's AUM reached $58.119 billion at the end of March, and based on those numbers the Victory team expects to have $138.1 billion in AUM once the USAA deal closes. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly


  1. Director Discussion Series - Open Forum via Zoom, September 29
  2. IMEA roundtable - Portfolio Construction, September 29
  3. MMI webinar - The Future of Marketing is Changing ... Are You Ready?, September 29
  4. IDC Speaker Series - A Conversation with Roger Ferguson, October 3
  5. IDC webinar - A Conversation with Roger Ferguson, Jr., October 3
  6. 5th annual Expect Miracles Atlantic Coast Classic, October 3
  7. Nicsa Fearless Leadership Symposium, Oct 6-7
  8. 7th Annual FUSE Forum, October 6
  9. 2022 ICI Securities Law Developments Conference - day 1, October 11
  10. MFDF Director Discussion Series - Open Forum (San Francisco), October 12
  11. 2022 ICI Securities Law Developments Conference - day 2, October 13
  12. MFDF In Focus: ESG Data Requirements - What Directors Need to Know, October 19
  13. 2022 MMI Annual Conference, Oct 19-21
  14. 2022 IDC Fund Directors Conference, Oct 24-26
  15. 18th annual Expect Miracles Wine & Spirits Event, October 27
  16. Buford Capital Securities Litigation Symposium, November 1
  17. IMEA All-Council Fall Summit, Nov 2-3
  18. Nicsa 2022 General Membership Meeting, Nov 2-3
  19. Tiburon CEO Summit XLIII, Nov 7-9
  20. 2022 ICI Tech Summit, Nov 8-9
  21. UCITS & AIFMD for U.S. Managers - New York, Nov 8-9
  22. 2022 MMI Distribution Leadership Forum, Nov 9-10
  23. MFDF Asset Management Industry Update and Director Governance Trends, November 10
  24. 3rd Annual ETFGI Global ETFs Insights Summit - United States, Nov 15-16
  25. 2022 MMI Alternative Investments Forum, November 16
  26. MFDF webinar - Mutual Fund CCO Compensation: The MPI Annual Survey Update, November 16




©All rights reserved to InvestmentWires, Inc. 1997-2022
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use