Victory Capital's $571 Billion Acquisition Creates Asset Giant

Victory Capital Holdings, Inc. VCTR announced an acquisition of First Eagle Investments Wednesday, a deal that will create a combined asset manager with $571 billion in client assets, the companies said.Key Takeaways: Victory Capital will pay about $7 billion for First Eagle, creating a $571 billion asset manager. First Eagle will keep its brand and investment teams under Victory Capital’s ownership. The deal is expected to close by the end of the first quarter of 2027, pending approvals. The acquisition adds First Eagle’s multi-asset, equity and fixed income funds to Victory Capital’s lineup. It also brings a $41 billion alternative credit platform, including collateralized loan obligations, a type of investment built from bundled business loans. Genstar Capital and First Eagle employees are selling the privately held firm for cash and stock, according to the companies. Victory Capital will pay about $7 billion for First Eagle. The price includes $4.4 billion in cash and $2 billion in new company stock, according to the announcement. It will also assume $575 million in First Eagle bonds carrying a 7.25% rate, which mature in 2032. Genstar will own about 14.6% of Victory Capital once the deal closes, the companies said. Its voting power will be capped at 4.9%, with the rest held as non-voting preferred shares locked up for three years. Genstar will also get two seats on Victory Capital’s board, which will grow to 11 directors. David Brown, Victory Capital’s chairman and chief executive, called the deal a fit for the company’s lineup. He pointed to First Eagle’s multi-asset and alternative credit funds as complementary additions. Brown said the combined firm will reach more clients through its U.S. distribution network and partnership with Amundi overseas. First Eagle will keep its own brand, investment teams and processes once the deal closes. That mirrors the approach Victory Capital has used in earlier acquisitions. Mehdi Mahmud, First Eagle’s president and chief executive, said the firm’s investment philosophy will not change under new ownership.Acquisition Adds Scale and New Asset ClassesThe deal fits a broader wave of consolidation this year. Cinthia Murphy, VettaFi’s director of research, wrote recently that acquisitions have become a popular path to scale in asset management. She cited T. Rowe Price (TROW) buying F/m Investments and Goldman Sachs (GS) acquiring NEOS Investments and Innovator ETFs. Murphy pointed to that competition as a sign of how crowded the ETF market has become. Issuer ranks have grown from 39 in 2010 to about 350 today, spread across more than 500 ETF brands. That crowding has pushed the top three issuers’ combined share of U.S.-listed ETF assets down to about 71%, from more than 90% a few years ago. The Victory ETF suite includes the $11 billion VictoryShares Free Cash Flow ETF (VFLO B+). See more: The ETF Landgrab Is On: Buy or Build? First Eagle’s numbers help explain its own appeal. About 92% of First Eagle’s rated mutual fund and ETF assets carry a four- or five-star rating from Morningstar, according to the announcement. The firm posted positive net flows in each of the last three years. It remains net flow positive so far in 2026. Victory Capital expects the deal to add about 35% to its adjusted earnings per share in 2027, a figure that includes roughly $280 million in annual cost savings, the companies said. As a result, the combined firm would generate about $3.2 billion in annual revenue. The deal is expected to close by the end of the first quarter of 2027, according to the announcement. It still needs regulatory approvals, client consents and a vote from Victory Capital shareholders. BofA Securities and RBC Capital Markets have lined up financing that includes a $3.5 billion term loan. First Eagle, based in New York, traces its roots to 1864, a history the firm points to in explaining its focus on avoiding permanent losses of client money across market cycles, according to the announcement. For more news, information, and strategy, visit ETFdb. VettaFi LLC (“VettaFi”) is the index provider for VFLO, for which it receives an index licensing fee. However, VFLO is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of VFLO.