SCHEDULE 13D/A: Amundi Finalizes Strategic Investment in Victory Capital, Securing Significant Stake and Board Seats

Amundi S.A. and Amundi Asset Management S.A.S. have completed their strategic acquisition of a significant equity stake in Victory Capital Holdings, Inc., gaining board representation and establishing long-term distribution agreements.

Summary

• Amundi S.A. and Amundi Asset Management S.A.S. (the "Reporting Persons") have completed the acquisition of equity interests in Victory Capital Holdings, Inc. (the "Issuer") on April 1, 2025.
• The transaction involved Amundi AM contributing all equity interests of Amundi Holdings US, Inc. to Victory Capital in exchange for 3,293,471 shares of Common Stock and 14,305,982 shares of newly issued non-voting convertible Preferred Stock.
• This acquisition represents 4.9% of the Issuer's outstanding Common Stock and, together with the Preferred Stock, constitutes 21.2% of the Issuer's outstanding capital stock on a fully diluted basis.
• The Reporting Persons may acquire additional Preferred Stock through true-up payments related to client consents, potentially increasing their aggregate ownership to up to 26.1% on a fully diluted basis.
• Amundi AM has entered into a Shareholder Agreement with Victory Capital, effective April 1, 2025, which includes provisions for registration rights, participation rights in future issuances, transfer restrictions until April 1, 2028, and a standstill period until April 1, 2028.
• The Shareholder Agreement also outlines ownership limitations, board representation rights (two directors appointed effective April 1, 2025), consent rights for certain Issuer actions, and a corporate opportunity waiver.
• Two 15-year distribution and services agreements became effective upon closing, where Amundi AM will distribute Victory Capital's products outside the U.S., and Victory Capital will distribute Amundi AM's products in the U.S.

Sentiment

Score: 8

Explanation: The document confirms the successful closing of a significant strategic investment and partnership, outlining clear long-term agreements and board representation, which are generally positive developments for the involved entities.

Positives

• The completion of the strategic transaction solidifies a significant partnership between Amundi, a major global asset manager, and Victory Capital.
• Amundi's acquisition of a substantial equity stake (up to 26.1% fully diluted) demonstrates a strong commitment to Victory Capital's long-term success.
• The appointment of two Amundi-designated individuals to Victory Capital's Board of Directors provides Amundi with direct influence and oversight in the Issuer's strategic direction.
• The 15-year distribution and services agreements create a mutually beneficial cross-distribution network, expanding market reach for both companies' investment products globally.
• The potential for Amundi to acquire additional Preferred Stock via true-up payments indicates potential for further alignment and growth based on client consents.

Negatives

• The issuance of new Common and Preferred Stock to Amundi results in dilution for existing Victory Capital shareholders.
• Amundi's shares are subject to transfer restrictions until April 1, 2028, which limits liquidity for a portion of the newly issued stock.
• The standstill provisions and ownership limitations restrict Amundi's ability to unilaterally increase its stake or influence beyond agreed terms for a specified period, potentially limiting aggressive strategic moves.

Risks

• Amundi's ability to acquire voting securities beyond 4.9% (and up to 10.1%, 14.9%, or 19.9% in later periods) is contingent on obtaining a non-control determination from the Board of Governors of the Federal Reserve System, if subject to the BHC Act.
• Amundi is prohibited from holding an economic stake in the Issuer exceeding 33.3% of 'total equity' if subject to the BHC Act, which could limit future expansion of its economic interest.
• The filing explicitly states that it should not be deemed an admission that the Reporting Persons are part of a 'group' (within the meaning of Rule 13d-5(b)(1)) by virtue of the Voting Agreements, indicating a potential legal interpretation risk regarding beneficial ownership and group formation.

Future Outlook

The document indicates a long-term strategic partnership, with Amundi potentially increasing its fully diluted ownership to 26.1% through true-up payments. The 15-year distribution agreements signify a sustained effort to expand product reach for both entities. Amundi also retains the option to pursue a majority acquisition of Victory Capital's capital stock after the standstill period, which would terminate existing ownership restrictions.

Industry Context

This transaction reflects a broader trend of consolidation and strategic partnerships within the global asset management industry, as firms seek to expand their geographic reach and product offerings. The cross-distribution agreements leverage the strengths of both Amundi (strong international presence) and Victory Capital (U.S. market expertise) to enhance competitive positioning and client access in key markets.

Management Changes

Corporate Governance

Related Party Transactions

• Two 15-year term distribution and services agreements became effective upon the closing of the transaction, where Amundi AM distributes the Issuer's investment products and services outside of the United States, and the Issuer distributes Amundi AM's investment products and services in the United States. These are related party transactions given Amundi's significant ownership and board representation.

Stakeholder Impact

• Shareholders: Experience dilution from the issuance of new shares but benefit from a strategic partnership with a global asset manager, potentially leading to enhanced growth and market reach.
• Employees: The Employee Shareholders Committee (ESC) was involved in a Voting Agreement to facilitate the transaction, indicating their alignment with the strategic move. The long-term nature of the partnership may offer stability and new opportunities.
• Customers: Will benefit from expanded access to a broader range of investment products and services through the cross-distribution agreements between Amundi and Victory Capital.
• Management: Gains a strategic partner with global reach and expertise, but also operates under the terms of the Shareholder Agreement, including consent rights and board representation for Amundi.

Next Steps

• The Issuer is required to file a shelf registration statement as promptly as practicable after April 1, 2025, to cover the resale of Amundi AM's Registrable Securities.
• Amundi AM may acquire additional Preferred Stock as a result of true-up payments in respect of client consents obtained in the 180 days following the closing of the Transaction.
• The 15-year distribution and services agreements between Amundi AM and the Issuer will continue to be implemented, facilitating cross-distribution of investment products.

Key Dates

Recommendation

Keywords

Victory Capital Holdings, Amundi S.A., Amundi Asset Management, SEC Schedule 13D, Strategic Investment, Asset Management, Equity Acquisition, Common Stock, Preferred Stock, Shareholder Agreement, Corporate Governance, Board Representation, Distribution Agreement, Investment Products, Financial Services