Form 4: Major Shareholder Adjusts Holdings and Board Representation

Amundi Asset Management SAS, a significant shareholder and director of Victory Capital Holdings, Inc., has filed an updated Form 4 detailing a correction to its preferred stock holdings and an exchange of common stock for preferred stock, alongside outlining its board nomination rights and voting agreements.

Summary

• Amundi Asset Management S.A.S. (Amundi AM) contributed Amundi Holdings US, Inc. to Victory Capital Holdings, Inc. (VCTR) on April 1, 2025, in exchange for 3,293,471 shares of VCTR Common Stock (representing 4.9% of the total number of shares of Common Stock issued and outstanding after giving effect to the issuance) and 14,305,982 newly issued shares of non-voting convertible Preferred Stock.
• On May 16, 2025, Amundi AM acquired an additional 5,436,318 shares of Preferred Stock as a result of a post-closing adjustment.
• A clerical error in a previously filed Form 4 on May 20, 2025, was corrected, confirming the total Preferred Stock beneficially owned prior to the current transaction as 19,742,300 shares, not 17,942,300 shares.
• On July 16, 2025, Amundi AM exercised its right to exchange 88,547 shares of Common Stock for an equal number of Preferred Stock.
• Following these reported transactions, Amundi beneficially owns 88,547 shares of Common Stock directly and 3,204,924 shares of Common Stock indirectly.
• Amundi also indirectly beneficially owns 19,830,847 shares of Preferred Stock.
• Amundi AM's total beneficial ownership represents 26.1% of VCTR's outstanding capital stock as of the closing date of the initial transaction on a fully diluted basis, subject to a further post-closing adjustment.

Sentiment

Score: 7

Explanation: The document reflects a significant strategic investment and partnership, indicating confidence in the issuer. The correction of a clerical error improves transparency. However, the lock-up period and limited convertibility of preferred stock introduce some constraints for the reporting person.

Positives

• Amundi's significant equity stake (26.1% fully diluted) indicates a strong, long-term commitment to Victory Capital Holdings.
• The Shareholder Agreement provides Amundi with board representation (two directors appointed on April 1, 2025), aligning interests and potentially bringing strategic expertise to the Issuer.
• The correction of a clerical error enhances transparency and accuracy of reported holdings for investors.

Negatives

• The Preferred Stock is not convertible at the holder's option, limiting Amundi AM's immediate flexibility to convert to voting common stock.
• A lock-up period until April 1, 2028, restricts Amundi's ability to transfer shares of Common Stock or Preferred Stock, potentially impacting liquidity.

Risks

• The Preferred Stock's limited convertibility options (only upon specific transfer events like widespread public distribution or transfer to the Issuer) could restrict Amundi's ability to monetize its investment or convert to voting common stock freely.
• The lock-up period until April 1, 2028, means Amundi cannot freely sell its shares, which could be a risk if market conditions change unfavorably before that date.
• The voting agreements with Crestview and the Employee Shareholders Committee, while disclaimed for Section 16 purposes, could imply a level of influence or control that might be viewed differently by other stakeholders or regulatory bodies.

Future Outlook

The Shareholder Agreement outlines future governance arrangements, including Amundi's ongoing right to nominate directors based on its ownership stake. The Preferred Stock's convertibility is tied to future transfer events, indicating a long-term holding strategy rather than immediate liquidity for Amundi.

Industry Context

This transaction reflects a strategic consolidation within the asset management industry, where larger firms like Amundi are acquiring specialized entities to expand their market reach and product offerings. The structure of the deal, involving both common and non-voting preferred stock, is common in such strategic partnerships, allowing for significant equity participation while managing immediate voting control and regulatory considerations.

Management Changes

Corporate Governance

Related Party Transactions

• Contribution of Amundi Holdings US, Inc. by Amundi AM (a wholly-owned subsidiary of Amundi S.A.) to Victory Capital Holdings, Inc. in exchange for Common and Preferred Stock.
• Voting Agreements between Amundi AM and Crestview/Employee Shareholders Committee, which could lead to deemed beneficial ownership for Section 16 purposes, though disclaimed by the reporting persons.

Stakeholder Impact

• Shareholders: Provides clarity on a major shareholder's holdings and influence. The lock-up period for Amundi's shares could reduce potential selling pressure in the near term. The strategic partnership may be viewed positively as it aligns interests with a significant global asset manager.
• Employees: The Employee Shareholders Committee's voting agreement with Amundi AM indicates alignment of interests regarding board nominations, potentially fostering stability.
• Management: Board composition is influenced by Amundi's nomination rights, requiring collaboration with a significant strategic investor, which could impact strategic direction and operational decisions.

Next Steps

• Amundi AM will continue to hold its Common and Preferred Stock, subject to the lock-up period until April 1, 2028.
• Amundi AM retains the right to nominate directors to the Issuer's board based on its ownership percentage.
• Future conversions of Preferred Stock to Common Stock will occur only under specific transfer conditions as outlined in the Shareholder Agreement.

Key Dates

Keywords

SEC Form 4, Beneficial Ownership, Shareholder Agreement, Preferred Stock, Common Stock, Equity Exchange, Corporate Governance, Investment, Asset Management, Strategic Partnership, Voting Agreement, Lock-up Period