Victory Capital(US:VCTR)2026-02-10 18:12Victory Capital Conference Call Summary Company Overview - Company: Victory Capital (NasdaqGS: VCTR) - AUM: Ended 2025 with $317 billion in Assets Under Management (AUM) [2][7] Key Drivers and Strategies 1. Amundi Pioneer Acquisition Integration: - 90% of planned $110 million in net expense synergies completed, with $97 million achieved [7][8] - Focus on completing integration and enhancing distribution platform [7][8] 2. Distribution Platform Development: - Expansion of international distribution channels, with positive net flows since acquiring Pioneer [8][9] - Launched five UCITS, including three legacy Victory products, and started selling U.S.-listed ETFs [8][33] 3. M&A Activity: - Actively pursuing acquisitions, targeting firms with AUM between $50 billion and $200 billion [9][12] - Emphasis on acquiring sizable platforms similar to the Pioneer acquisition [9][12] Market Sentiment and Challenges 1. Industry Sentiment: - Smaller asset managers face challenges in maintaining independence due to distribution and operational costs [22][24] - Increasing trend of firms considering acquisitions or being acquired [26] 2. Client Segmentation: - Focus on growing in retirement, insurance, and RIA channels [29][30] - International markets, particularly Asia and Europe, seen as significant growth opportunities [56][58] Product Development and Performance Metrics 1. Investment Performance: - Monitoring investment performance as a key metric for success post-acquisition [37] - Positive net flows and strong product demand since Pioneer acquisition [38] 2. Growth Areas: - Strong growth anticipated in VictoryShares (ETF business) and fixed income products [41][42] - Development of model portfolios and tax-efficient products planned for 2026 [65][70] Financial Performance and Projections 1. Margins: - Current margin guidance at 49%, with recent quarters exceeding 52% [73] - Focus on scalable technology to maintain margins [74] 2. AUM Growth Target: - Long-term goal of reaching $1 trillion in AUM, primarily through M&A [75][77] - Expectation of low single-digit organic growth alongside larger acquisitions [77] Capital Allocation Strategy 1. Prioritization of Acquisitions: - Primary use of capital will be for acquisitions, followed by stock buybacks [89][92] - Commitment to maintaining and increasing dividends [92] Future Outlook 1. Industry Trends: - Anticipation of consolidation within the asset management industry, with larger firms likely to succeed [94][95] - Importance of operational efficiency and technological investment highlighted for future competitiveness [96] 2. Market Positioning: - Victory Capital aims to be a trillion-dollar manager with a diverse product offering, including public markets, private markets, and international products [80][81]