Form 4: Amundi Exchanges VCTR Common for Preferred Stock

Amundi, a 10% owner and director of Victory Capital Holdings, Inc., reported an exchange of 100,000 common shares for preferred shares, alongside significant beneficial ownership through voting agreements.

Summary

• Amundi Asset Management S.A.S. (Amundi AM) exchanged 100,000 shares of Victory Capital Holdings, Inc. (VCTR) Common Stock for an equal number of Preferred Stock on March 18, 2026.
• This transaction was an exercise of Amundi AM's right under a Shareholder Agreement.
• Following this transaction, Amundi AM indirectly beneficially owns 2,954,924 shares of Common Stock and 20,036,821 shares of Preferred Stock.
• Amundi AM initially acquired 3,293,471 shares of Common Stock and 14,305,982 shares of Preferred Stock on April 1, 2025, in exchange for Amundi Holdings US, Inc.
• Post-closing adjustments led to Amundi AM acquiring an additional 5,436,318 Preferred Stock on May 16, 2025, and forfeiting 44,026 Preferred Stock on August 1, 2025.
• Amundi AM's total beneficial ownership was 26.1% of VCTR's outstanding capital stock on a fully diluted basis as of May 16, 2025.
• Amundi AM has board representation rights, with two individuals designated by Amundi AM appointed to VCTR's board on April 1, 2025.
• Reporting Persons are restricted from transferring Common or Preferred Stock until April 1, 2028, with certain exceptions.
• Preferred Stock is non-convertible at the holder's option, converting to Common Stock only upon specific "Automatic Transfer Conversion" events on a one-to-one basis.
• Amundi AM also entered into Voting Agreements with Crestview and the Employee Shareholders Committee, which may lead to them being deemed to beneficially own shares held by these parties.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing as moderately positive, reflecting a planned strategic move by a significant shareholder to adjust its equity structure within the framework of existing agreements, reinforcing long-term commitment and governance influence.

Positives

• Amundi AM's significant stake (26.1% fully diluted) and board representation indicate a strong strategic alignment and commitment to Victory Capital.
• The structured nature of the Preferred Stock (non-convertible at holder's option, transfer restrictions) suggests a long-term, stable investment rather than short-term speculation.
• The Voting Agreements with Crestview and the Employee Shareholders Committee provide Amundi AM with influence over board nominations, enhancing governance stability.

Negatives

• The transfer restrictions on Common and Preferred Stock until April 1, 2028, limit Amundi AM's liquidity and flexibility with its investment.
• The non-convertible nature of the Preferred Stock at the holder's option means Amundi AM cannot freely convert to voting Common Stock, potentially limiting direct voting power unless specific transfer conditions are met.

Risks

• The "deemed beneficial ownership" through Voting Agreements, while disclaimed for Section 16 purposes, could still raise questions about control and influence under other regulatory frameworks.
• Future post-closing adjustments to the Preferred Stock amount could occur, as evidenced by past adjustments.
• The restrictions on transferring shares until April 1, 2028, could impact Amundi AM's ability to exit or adjust its position if market conditions change unfavorably.

Future Outlook

The filing indicates a long-term strategic partnership between Amundi and Victory Capital, reinforced by Amundi's significant equity stake, board representation, and the structured nature of their investment with transfer restrictions extending to April 1, 2028.

Management Comments

• Amundi AM and Victory Capital Holdings, Inc. 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.
• Amundi AM has the right to require the Issuer to nominate and use reasonable best efforts (subject to applicable law and the exercise of fiduciary duties) to have two individuals designated by Amundi AM elected to the Issuer's board of directors.
• The Preferred Stock is not convertible at the option of the holder and is only convertible into shares of Common Stock after a transfer.
• Amundi AM is permitted to exchange its Common Stock for Preferred Stock at any time and will be required to exchange its Common Stock for Preferred Stock under certain circumstances.

Industry Context

StockSavvy.ai notes that this Form 4 filing highlights a strategic move by Amundi, a major global asset manager, to solidify its long-term investment and influence in Victory Capital Holdings. Such large-scale, structured equity investments and board representation are common in the asset management industry when a firm seeks to integrate operations or establish a significant strategic partnership, often aiming for synergies and market expansion. The use of non-voting preferred stock with specific conversion triggers is a mechanism to manage regulatory implications, particularly around control thresholds, while maintaining economic interest.

Comparison to Industry Standards

• The 26.1% fully diluted beneficial ownership by Amundi AM is a substantial stake, comparable to strategic investments seen in other asset management mergers or partnerships, such as BlackRock's acquisition of Barclays Global Investors, where significant equity stakes and board representation were key components of the integration strategy.
• The inclusion of transfer restrictions until April 1, 2028, is a standard practice in strategic equity investments, ensuring stability and commitment from the major shareholder, similar to lock-up periods observed in private equity investments or post-IPO scenarios for large shareholders.
• The structure of non-voting convertible preferred stock, with conversion tied to specific transfer events, is a sophisticated financial instrument often used to navigate regulatory ownership limits (e.g., Bank Holding Company Act implications) while providing future flexibility, a strategy employed by firms like Berkshire Hathaway in some of its financial sector investments.

Management Changes

Corporate Governance

Related Party Transactions

• Contribution by Amundi AM to Victory Capital of all equity interests of Amundi Holdings US, Inc. in exchange for VCTR Common and Preferred Stock.
• Exercise by Amundi AM of its right to exchange Common Stock for Preferred Stock with Victory Capital.

Stakeholder Impact

• Shareholders: The structured nature of Amundi's investment and board representation suggests long-term stability and strategic alignment, potentially benefiting long-term shareholders. The non-voting nature of the Preferred Stock (until conversion) limits immediate dilution of voting power for other common shareholders.
• Management: Amundi's board representation and voting agreements provide a clear framework for strategic input and oversight, potentially influencing management decisions.
• Employees: The Employee Shareholders Committee's voting agreement with Amundi AM indicates a structured approach to employee shareholding influence in relation to the major investor.

Next Steps

• Continued adherence to the Shareholder Agreement terms, including transfer restrictions until April 1, 2028.
• Potential future exchanges of Common Stock for Preferred Stock by Amundi AM under certain circumstances.
• Potential conversion of Preferred Stock to Common Stock upon specific "Automatic Transfer Conversion" events.

Key Dates

Recommendation

The filing details an internal equity restructuring by a significant insider, Amundi, exchanging common stock for preferred stock as per pre-existing agreements. This action, while demonstrating Amundi's continued strategic involvement and long-term commitment, does not introduce new material information that would fundamentally alter the investment thesis for Victory Capital Holdings. The transaction is an expected operational adjustment rather than a signal for a significant change in the company's valuation or prospects, thus warranting a 'hold' recommendation for existing investors.

Keywords

Victory Capital Holdings, VCTR, Amundi, SEC Form 4, Beneficial Ownership, Preferred Stock, Common Stock, Shareholder Agreement, Voting Agreement, Insider Trading, Corporate Governance, Investment Management