Though dwarfed by the TIAA-CREF acquisition of Nuveen, Victory Capital announced the acquisition of fellow midwest investment manager Munder Capital. Both firms are backed by Crestview Partners, which provided additional capital for the deal.
Both also have a foothold in the DCIO market, although Victory, led by industry vet Scott Neeb, is stronger and has a richer history and more significant resources in the field. The combined firm will have $37 billion, split almost equally.
Both firms emerged from banks — Key Bank sold Victory last year for $246 million and Munder was sold by Commerica Bank in 2006 for $302 million, when its assets were $25.1 billion, almost 40% higher than their current AUM.
While it would be delusional to say that retirement is driving the recent merger activity in the asset management world, it might not be a coincidence that both the Nuveen and Munder deals have deep roots in the DC world. TIAA’s acquisition of Nuveen not only puts them in position to challenge Fidelity and Vanguard, notes InvestmentNews, but it also gives them instant access to the record keepers and BDs with which Nuveen has good relations. And the Munder acquisition by Victory just gives both firms more resources to compete with much larger, well-heeled DCIOs.
Expect more consolidation in the DC world among record keepers and advisory firms, where scale matters even more in a deflationary market. But expect more asset management deals as well, especially BD mergers — led by RCAP, which recently bought Cetera and four other IBDs.
