Victory Capital Management is to acquire Munder Capital Management and its wholly owned subsidiary, Integrity Asset Management.
The all-cash purchase will form a new independent investment advisory firm headquartered in Cleveland, Ohio.
The transaction combines two Midwest-based investment management firms with multi-boutique business models. Financial terms were not disclosed.
The combination will result in an investment management firm with over USD37 billion of assets under management and a diversified line-up of investment offerings. The firm’s investment teams' underlying investment processes and decision-making will not change.
“Victory and Munder are a natural fit culturally and from a business model perspective,” says David Brown, chairman and chief executive officer of Victory. “Both organisations value the same approach, with autonomous, chief investment officer-led investment teams that manage client assets in their own unique styles. Munder has four world-class investment teams that have excelled under this structure and we are excited to help them continue their growth going forward. By joining forces, we create an investment management firm that is even better positioned to achieve our clients’ goals and objectives for the long term.”
“The scale that results from forming the new company will allow our portfolio managers to continue having access to best-in-class resources and support to maintain their singular focus on money management,” says Tony Dong, Munder’s vice chairman, chief investment officer and lead manager of Munder’s mid-cap investment team. “We will remain strongly aligned with our clients, focused on producing strong risk-adjusted returns and an attentive level of service. The new enterprise will provide a diversified platform of investment solutions that will allow us to continue to serve our clients. We share in the excitement to be part of this new company and believe our clients will readily appreciate the value and opportunity as well.”
Daniel Bandi, chief investment officer of Integrity, says: “Integrity was founded on the principle of providing consistent, superior performance fostered by a culture that is both independent and client-centric. This opportunity will allow us to continue delivering strong performance for our clients today in the same environment and, more importantly, in the future.”
Senior executives and investment management personnel from Victory, Munder and Integrity will be significant investors in the new entity.
Additional equity financing for the new company will be led by funds managed by Crestview Partners and Reverence Capital Partners whose investors include US and International institutional and high net worth investors. Each will make a significant investment in the new company.
Upon completion of the transaction, Victory’s David Brown will be appointed as chairman and CEO of the new company and Christopher Ohmacht, current president of Victory, will serve as president. Jim FitzGerald, current president of Munder, will become vice chairman. The new company's board of directors will be management-led, with Brown as its chairman and Ohmacht as an employee director.
The transaction, which is expected to close by the end of the third quarter of 2014, is subject to customary closing conditions and consents, including the consent of certain Munder-advised mutual funds and other Munder investment advisory clients.
Morgan Stanley provided financial advice and Willkie Farr & Gallagher provided legal advice to Victory. Munder was advised by Goldman, Sachs & Co., Sandler O’Neill & Partners and Davis Polk & Wardwell. Reverence Capital Partners was advised by Evercore Group and Wachtell, Lipton, Rosen & Katz.