Victory Capital buys First Eagle for $7 billion, forming $571 billion firm

Victory Capital agreed to buy First Eagle Investments for about $7 billion, creating a $571 billion asset manager and deepening its ties to Amundi, which holds a 27 percent economic interest in the buyer.

"This is a transformational transaction that represents the next chapter in the evolution of our business," said David Brown, chairman and chief executive of Victory Capital. "First Eagle is a premier global asset manager, with a diversified product lineup spanning global multi-asset, equities, fixed income, and a scaled alternatives platform that includes CLOs and alternative credit."

The deal comprises about $4.4 billion in cash and $2 billion in newly issued Victory Capital equity, plus the assumption of $575 million of First Eagle's 7.25 percent senior secured notes due 2032. First Eagle manages about $222 billion in assets as of July 31, including a $41 billion CLO and alternative credit platform, while Victory Capital holds $348.8 billion in total client assets.

The transaction is expected to be about 35 percent accretive to 2027 adjusted earnings per share, helped by roughly $280 million in anticipated net expense savings, and to close by the end of the first quarter of 2027. The combined firm would generate annual revenue of about $3.2 billion.

Amundi's strategic stake

Amundi, Europe's largest asset manager with close to €2.6 trillion under management, distributes the U.S. and global strategies of both Victory Capital and First Eagle to clients outside the U.S. The French firm, a subsidiary of Crédit Agricole, will remain the largest shareholder of Victory Capital after the deal closes, based on the projected financing structure.

"We warmly welcome this transformational transaction," said Valérie Baudson, Amundi's chief executive. "Victory Capital and First Eagle are two excellent asset managers that we know intimately. Together, they form a compelling and highly complementary platform."

Amundi expects the deal to lift its own earnings per share after full integration and delivery of the anticipated savings. The transaction also reinforces the strategic rationale of Amundi's partnership with Victory Capital, which operates one of Amundi's six international investment hubs in San Antonio, Texas.

Deal structure and ownership

Genstar Capital, which owns First Eagle, will hold about 14.6 percent of Victory Capital on a fully diluted, as-converted basis, with its voting interest capped at 4.9 percent. The private equity firm's entire position is subject to a three-year lock-up, and it will designate two directors to a board that expands to 11 members upon closing.

Victory Capital has secured fully committed financing from BofA Securities and RBC Capital Markets, comprising a new $3.5 billion term loan B facility, about $950 million of new secured notes, and an upsized $200 million revolving credit facility. First Eagle will operate on Victory Capital's platform while retaining its brand and investment autonomy, the same model used in Victory Capital's prior acquisitions.

The deal continues a wave of consolidation in asset management as firms seek scale to absorb technology and distribution costs. First Eagle, whose heritage dates to 1864, has generated positive net flows in each of the past three years, with 92 percent of its rated mutual fund and ETF assets holding a four- or five-star Morningstar rating. The combined platform positions Victory Capital among the largest publicly traded traditional asset managers in the U.S., competing with BlackRock's $11.5 trillion and Vanguard's $10 trillion in a sector where fee compression has pushed smaller firms to merge.

This article is for informational purposes only and does not constitute investment advice.