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Rating:An ETF Strategist Sells For $480MM, Plus Earnout Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, November 05, 2021

An ETF Strategist Sells For $480MM, Plus Earnout

Reported by Neil Anderson, Managing Editor

A publicly traded multi-boutique is poised to buy its 12th boutique for $480 million up front, plus an earnout based on revenue growth targets.

David C. "Dave" Brown
Victory Capital Holdings, Inc.
Chairman, CEO
Yesterday, Dave Brown, chairman and CEO of Victory Capital Holdings, Inc. [profile], and Michael Goldman, managing partner of WestEndAdvisors, LLC, confirmed that San Antonio-based Victory has agreed to buy 100 percent of Charlotte, North Carolina-based WestEnd. WestEnd is an ETF strategists that offers SMAs.

According to WestEnd's most recent form ADV, filed back in August, the firm is principally owned by several of its employees: Goldman, Ned Durden (partner, chief investment strategist, and PM), and Fritz Porter (partner, chief investment officer, and PM) each hold between 10 percent and 24 percent of the company; Graham Hunt (partner and chief financial officer), Jason Leibowitz (partner), and Ty Peebles hold between five percent and nine percent each; and Staunton Harkins (partner) and Jim Cox (chief compliance officer) hold less than five percent each. Kudu, a backer of multiple fund firms, also owns less than four percent.

The deal is expected to close by the end of 2021. BofA Securites advised Victory on the deal, while PJT Partners advised WestEnd. On the legal side, Willkie Farr & Gallagher LLP advised Victory, while Alston & Bird LLP advised WestEnd.

17-year-old WestEnd has 25 employees working with about $18 billion in assets, up $3.5 billion in the first three quarters of 2021 alone. Thus, the deal's price translates into 2.67 percent of WestEnd's assets. Victory, meanwhile, had $159.9 billion in AUM as of September 30, so the deal would be an 11.26-percent boost to its AUM.

"The acquisition of WestEnd Advisors is very strategic and transformational to our business," Brown states.

"Victory Capital aligns culturally with WestEnd. They also possess 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," Goldman states. "There will be no changes to our proven investment process or to our team as a result of this transaction."

News of the Victory-WestEnd deal comes three days after Victory closed on its planned acquisition of its 11th boutique. 

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