Victory Capital's Strategic Partnership with Amundi: A Game Changer in 2024

In the fourth quarter of 2024, Victory Capital Holdings, Inc. (NASDAQ: VCTR) reported record-breaking financial results, driven by a strategic partnership with Amundi Asset Management S.A.S. ("Amundi"). This alliance, announced in 2024, has significantly impacted Victory Capital's growth trajectory and financial performance. Let's delve into the key aspects of this partnership and its impact on Victory Capital's success.

Expanding Investment Capabilities and Distribution Reach

The strategic partnership with Amundi includes the acquisition of Amundi's U.S. business, former Pioneer Investments, and a 15-year exclusive distribution agreement. This alliance has enabled Victory Capital to:

1. Diversify and deepen investment capabilities: By acquiring Amundi's U.S. business, Victory Capital has expanded its investment offerings, providing clients with access to a broader range of investment strategies and products.
2. Strengthen U.S. intermediary distribution efforts: The acquisition has also bolstered Victory Capital's distribution network, allowing it to reach a larger audience of U.S. intermediaries and investors.
3. Globalize the company: The 15-year exclusive distribution agreement has significantly broadened and deepened Victory Capital's distribution reach outside the U.S., enabling it to tap into new markets and client segments.

Financial Performance and Synergies

Victory Capital's strategic partnership with Amundi has translated into impressive financial results. In the fourth quarter of 2024, the company reported:

* Adjusted earnings per diluted share with tax benefit of $1.45, up from $1.35 in the same period a year ago
* Adjusted EBITDA of $125.5 million, compared to $121.3 million in the fourth quarter of 2023
* Adjusted EBITDA margin of 54.0%, up from 53.7% in the fourth quarter of 2023

For the full year of 2024, Victory Capital achieved:

* Adjusted earnings per diluted share with tax benefit of $5.36, up from $4.51 in 2023
* Adjusted EBITDA of $475.6 million, compared to $418.0 million in 2023
* Adjusted EBITDA margin of 53.2%, up from 50.9% in 2023

Victory Capital expects to realize $100 million in expense synergies from the acquisition by the end of the first quarter of 2025, further enhancing its financial performance.

Looking Ahead

The strategic partnership with Amundi has positioned Victory Capital for continued growth and success. As the company integrates Amundi's U.S. business and leverages the exclusive distribution agreement, it is well-positioned to:

* Further diversify and deepen its investment capabilities
* Strengthen its U.S. intermediary distribution efforts
* Globalize its distribution reach, tapping into new markets and client segments
* Realize expense synergies, driving improved financial performance

In conclusion, Victory Capital's strategic partnership with Amundi has been a game changer in 2024, driving record-breaking financial results and setting the stage for continued growth and success. As the company continues to execute on its strategic initiatives, it is poised to capitalize on the opportunities presented by this transformative alliance.