Form 4: Amundi Adjusts VCTR Holdings, Board Seats Secured

Amundi, a 10% owner and director of Victory Capital Holdings, Inc., reported changes in its beneficial ownership, including an exchange of common stock for preferred stock and details on its board representation and voting agreements.

Summary

• Amundi Asset Management S.A.S. (Amundi AM) and Amundi S.A. (collectively, Reporting Persons) are directors and 10% owners of Victory Capital Holdings, Inc. (VCTR).
• On April 1, 2025, Amundi AM contributed Amundi Holdings US, Inc. to VCTR in exchange for 3,293,471 shares of Common Stock (representing 4.9% of total outstanding) and 14,305,982 shares of newly issued non-voting convertible Preferred Stock.
• On May 16, 2025, Amundi AM acquired an additional 5,436,318 shares of Preferred Stock due to a post-closing adjustment, resulting in Amundi AM beneficially owning 26.1% of VCTR's outstanding capital stock on a fully diluted basis.
• On August 1, 2025, Amundi AM forfeited 44,026 shares of Preferred Stock as a result of a post-closing adjustment.
• On October 29, 2025, Amundi AM exercised its right to exchange 150,000 shares of Common Stock for an equal number of Preferred Stock shares.
• Reporting Persons are restricted from transferring their Common or Preferred Stock until April 1, 2028, subject to certain exceptions.
• Amundi AM has the right to nominate two directors to VCTR's Board if it owns at least 50% of the acquired shares, or one director if it owns at least 33% (but less than 50%). Two Amundi AM designees were appointed to the Board on April 1, 2025.
• The Preferred Stock is not convertible at the holder's option and converts to Common Stock on a one-to-one basis only upon specific 'Automatic Transfer Conversion' events.
• Amundi AM entered into Voting Agreements on July 8, 2024, with Crestview and the Employee Shareholders Committee, where these parties agreed not to oppose Amundi AM's director nominees. Due to these agreements, Reporting Persons may be deemed to beneficially own their securities, though Amundi disclaims this for Section 16 purposes.

Sentiment

Score: 7

Explanation: The filing indicates a significant strategic investment and integration by Amundi into Victory Capital, securing substantial ownership and board representation. While there are minor adjustments and transfer restrictions, the overall tone suggests a structured, long-term partnership aimed at mutual benefit. The complexity of the preferred stock conversion and voting agreements are standard for such deals, reflecting careful structuring rather than negative sentiment.

Positives

• Amundi AM secured significant equity ownership in Victory Capital Holdings, Inc., reaching 26.1% on a fully diluted basis.
• Amundi AM gained board representation with two designated individuals appointed to VCTR's Board of Directors, indicating influence in corporate governance.
• Voting Agreements with Crestview and the Employee Shareholders Committee provide support for Amundi AM's director nominations, strengthening its governance position.
• The transaction involved the contribution of Amundi Holdings US, Inc. to VCTR, suggesting a strategic alignment or asset consolidation.

Negatives

• Amundi AM forfeited 44,026 shares of Preferred Stock due to a post-closing adjustment, reducing its total holdings slightly.
• Shares of Common Stock and Preferred Stock beneficially owned by Amundi are subject to a transfer restriction until April 1, 2028, limiting liquidity.
• The Preferred Stock is not convertible at the option of the holder, restricting flexibility in converting to Common Stock unless specific transfer conditions are met.

Risks

• Transfer restrictions on Common and Preferred Stock until April 1, 2028, could limit Amundi's ability to monetize its investment or adjust its position in VCTR.
• The complex conversion terms of the Preferred Stock, which are not at the holder's option, introduce uncertainty regarding the timing and conditions under which these shares can be converted into more liquid Common Stock.
• The 'may be deemed' beneficial ownership of securities held by Crestview and the Employee Shareholders Committee due to voting agreements, despite a disclaimer, could potentially lead to regulatory scrutiny or misinterpretation of Amundi's total influence.

Future Outlook

The filing details the terms of the Shareholder Agreement and Voting Agreements, which outline Amundi AM's long-term strategic involvement, including board representation rights contingent on ownership levels and transfer restrictions until April 1, 2028. The Preferred Stock conversion mechanism also points to future potential changes in the composition of Amundi's holdings.

Management Comments

• On April 1, 2025, Amundi Asset Management S.A.S. ("Amundi AM") and Victory Capital Holdings, Inc. (the "Issuer") entered into a Shareholder Agreement... in connection with the contribution by Amundi AM to the Issuer of all of the issued and outstanding equity interests of Amundi Holdings US, Inc.
• Pursuant to the terms of a Shareholder Agreement, the Reporting Persons are not permitted to transfer shares of Common Stock or Preferred Stock beneficially owned by them until April 1, 2028, subject to certain exceptions.
• Under the terms of the Shareholder Agreement, Amundi AM has the right to require the Issuer to nominate and use reasonable best efforts... to have two individuals designated by Amundi AM elected to the Issuer's board of directors... for so long as Amundi AM and its permitted transferees own at least 50% of the shares Amundi AM acquired... and one individual... for so long as Amundi AM... own at least 33% (but less than 50%).
• In accordance with the terms of the Shareholder Agreement, the Issuer appointed two individuals designated by Amundi AM to the Board on April 1, 2025.
• Pursuant to the terms of the Voting Agreements, each of Crestview and the ESC have agreed not to nominate any person for election to the Board in lieu of, or in a contested election with, such nominee of Amundi AM, for so long as Amundi AM retains the right to nominate any person for election to the Board.
• This filing shall not be deemed an admission that the Reporting Persons are, for purposes of Section 16 of the Act or otherwise, part of a 'group' (within the meaning of Rule 13d-5(b)(1) under the Act) by virtue of the Voting Agreements or have beneficial ownership of the shares of Common Stock held by any party thereto.

Industry Context

This filing reflects a strategic investment and integration within the asset management industry. Amundi, a major European asset manager, is increasing its stake and influence in Victory Capital, a U.S.-based investment management firm. Such transactions often aim to expand market reach, diversify product offerings, or achieve synergies. The complex share structure (common vs. preferred, conversion rules) and voting agreements are common mechanisms used in strategic partnerships to balance control, liquidity, and regulatory compliance in the financial sector.

Comparison to Industry Standards

• The acquisition of a significant minority stake (26.1% fully diluted) by a strategic investor like Amundi in Victory Capital is a common strategy for market expansion, similar to how other global asset managers like BlackRock or Vanguard might acquire or partner with smaller, specialized firms to broaden their offerings or geographic footprint.
• The use of non-voting convertible preferred stock with specific conversion triggers is a standard mechanism in such strategic investments, allowing the investor to gain economic exposure and potential future voting rights while managing immediate regulatory implications (e.g., Bank Holding Company Act definitions of 'voting shares').
• Board representation rights, contingent on ownership thresholds (e.g., two directors for >50% ownership, one for >33%), are typical in shareholder agreements for significant minority investors, ensuring alignment of interests and oversight.
• Lock-up periods (transfer restrictions until April 1, 2028) are standard practice in strategic equity transactions to demonstrate long-term commitment and prevent immediate market dilution or instability post-deal, comparable to lock-ups seen in IPOs or private equity exits.
• Voting agreements with other large shareholders (Crestview) and employee groups (ESC) to support director nominations are a common tactic to consolidate influence and ensure stable governance, often seen in companies with diverse shareholder bases.

Management Changes

Corporate Governance

Related Party Transactions

• The transaction involving Amundi AM contributing Amundi Holdings US, Inc. to VCTR in exchange for equity, and the subsequent shareholder and voting agreements, constitutes a significant related party transaction between Amundi (a 10% owner and director) and Victory Capital.

Stakeholder Impact

• Shareholders: Existing shareholders may see increased stability due to a significant strategic investor (Amundi) with long-term commitment (transfer restrictions). The complex preferred stock structure and voting agreements could influence future governance and share price dynamics.
• Employees: The Employee Shareholders Committee's involvement in a voting agreement suggests their interests are considered, potentially aligning with Amundi's strategic vision.
• Management: Amundi's board representation and voting agreements will likely influence management decisions and strategic direction.

Next Steps

• Amundi AM will continue to hold its Common and Preferred Stock, subject to transfer restrictions until April 1, 2028.
• The Preferred Stock will convert to Common Stock only upon specific 'Automatic Transfer Conversion' events.
• Amundi AM retains the right to nominate directors to VCTR's Board based on its ownership percentage.

Key Dates

Recommendation

This Form 4 details a strategic investment and integration by Amundi into Victory Capital, solidifying Amundi's significant ownership and board influence. The transaction involves complex equity structures and voting agreements, indicating a long-term strategic partnership rather than a simple buy or sell signal. While the lock-up period restricts Amundi's immediate liquidity, it also signals commitment. The adjustments to preferred stock holdings are minor in the context of the overall deal. For a seasoned investor, this filing primarily confirms the ongoing strategic alignment and governance structure, suggesting a 'hold' position to observe the execution of this partnership and its impact on VCTR's future performance. There are no immediate catalysts for a strong buy or sell based solely on these ownership changes.

Keywords

Amundi, Victory Capital Holdings, VCTR, SEC Form 4, Beneficial Ownership, Common Stock, Preferred Stock, Shareholder Agreement, Board of Directors, Corporate Governance, Voting Agreement, Equity Acquisition, Post-Closing Adjustment, Transfer Restrictions