Exhibit 99.1

 

News Release

 

 

 

VICTORY CAPITAL REPORTS SECOND QUARTER 2018 RESULTS

 

Second Quarter 2018 Highlights1

 

·           Assets under management (“AUM”) of $62.3 billion as of June 30, 2018, a 9% increase from June 30, 2017

·           Strong investment performance, with 83% of AUM outperforming its respective benchmarks over the trailing one-year period, 69% over three-years, 80% over five-years, and 83% over ten-years as of June 30, 2018

·           Overall net outflows of $102 million; positive net flows of $524 million into our focus asset classes

·           $104.4 million in revenue, a 3% increase from the second quarter of 2017

·           GAAP earnings of $0.26 per diluted share, compared to GAAP earnings of $0.04 per diluted share for the second quarter of 2017

·           Adjusted Net Income with tax benefit per diluted share of $0.41, a 28% increase over the Adjusted Net Income with tax benefit per diluted share for the second quarter of 2017

·           Operating margin of 28.4%, up from 19.3% in the second quarter of 2017

·           Adjusted EBITDA margin of 39.0%, up from 35.9% in the second quarter of 2017

 

Cleveland, Ohio, August 7, 2018 — Victory Capital Holdings, Inc. (NASDAQ: VCTR) (“Victory Capital” or the “Company”) today reported its results for the three months ended June 30, 2018.

 

“I am pleased to report that Victory Capital delivered strong financial performance in the second quarter,” said David Brown, Chairman and Chief Executive Officer. “Investment results remained strong with 83% of our AUM outperforming its respective benchmarks over the trailing one-year period. AUM increased during the quarter, and we saw a measurable improvement in our net flows relative to last quarter. We also remained committed to the prudent execution of our capital management plan while achieving strong earnings growth and meaningful margin expansion.

 

“Total AUM grew to $62.3 billion as of June 30, 2018, which is the result of the improving flow picture and positive market action. Gross flows for the quarter were strong at $3.5 billion, while overall net flows were relatively flat at ($102) million. We continued to experience somewhat elevated levels of client rebalancing activity. However, that was primarily offset by positive net flows of $524 million into our focus asset classes. Our ‘won-but-not-funded’ pipeline is healthy as are our overall sales prospects.

 

“Sales momentum in our VictoryShares ETFs remained strong. Net flows into our ETFs were $200 million for the quarter and $652 million for the first six months of 2018. Our ETFs have experienced positive net flows every quarter — and in 37 of the 38 months — since we entered the ETF business via the CEMP acquisition in April 2015. Year over year as of June 30, 2018, our ETF market share has increased by 55% according to Morningstar.

 

“Looking ahead, we remain committed to creating long-term value for our shareholders through the disciplined execution of our corporate vision, which combines strategic acquisitions with organic growth. We believe our next generation, integrated multi-boutique business model is attractive to investment firms looking for a strategic partner, and we have an active pipeline of potential M&A opportunities. Our focus is on identifying and acquiring the ‘growers of the future,’ unique, innovative products that solve issues for client portfolios. As in the past, serving the needs of our clients remains our top priority.”

 

 

1 Adjusted measures are non-GAAP financial measures.  An explanation of these non-GAAP financial measures is included under the heading “Information Regarding Non-GAAP Financial Measures” at the end of this press release.  Please see the non-GAAP reconciliation tables.

 

 

The table below presents AUM, and certain GAAP and non-GAAP (“adjusted”) financial results.

 

(in millions except per share amounts or as otherwise noted)

 

		For the Three Months Ended									For the Six Months Ended
		June 30,			March 31,			June 30,			June 30,			June 30,
		2018			2018			2017			2018			2017
Assets Under Management
Ending		$	62,256		$	60,855		$	56,973		$	62,256		$	56,973
Average		61,617			62,020			56,784			61,819			56,531
Flows
Gross		$	3,521		$	3,685		$	3,953		$	7,205		$	8,679
Net		(102)			(633)			(601)			(735)			(986)
Net flows excluding Diversified Equity(1)		(102)			(633)			(314)			(735)			(368)
Consolidated Financial Results (GAAP)
Revenue		$	104.4		$	105.0		$	100.9		$	209.4		$	201.6
Revenue realization (in bps)		68.0			68.6			71.3			68.3			71.9
Operating expenses		74.7			77.7			81.5			152.4			162.6
Income from operations		29.7			27.3			19.4			57.0			39.0
Operating margin		28.4%			26.0%			19.3%			27.2%			19.3%
Net income		18.7			10.5			2.4			29.2			6.8
Earnings per diluted share		$	0.26		$	0.16		$	0.04		$	0.42		$	0.11
Adjusted Performance Results (Non-GAAP)(2)
Adjusted EBITDA		$	40.7		$	39.8		$	36.2		$	80.5		$	69.8
Adjusted EBITDA margin		39.0%			37.9%			35.9%			38.4%			34.6%
Adjusted net income		26.6			23.1			13.9			49.6			26.9
Tax benefit of goodwill and acquired intangibles		3.3			3.3			4.9			6.6			9.8
Adjusted net income with tax benefit		29.9			26.4			18.8			56.3			36.7
Adjusted net income with tax benefit per diluted share		$	0.41		$	0.40		$	0.32		$	0.81		$	0.62

 

 

(1) In May 2017, the Company made a decision to exit the Diversified Equity Franchise; all remaining AUM was transferred to the Munder Capital Management Franchise to manage beginning May 15, 2017.

 

(2) Adjusted EBITDA and Adjusted Net Income are non-GAAP financial measures.  Reconciliation of each of Adjusted EBITDA and Adjusted Net Income to net income have been provided in the non-GAAP reconciliation tables in this press release.  An explanation of these non-GAAP financial measures is included below under the heading “Information Regarding Non-GAAP Financial Measures”. 

 

AUM, Flows and Investment Performance

 

Victory Capital’s AUM increased by $1.4 billion to $62.3 billion at June 30, 2018, compared to $60.9 billion at March 31, 2018. The increase was due to market appreciation of $1.5 billion that was modestly offset by net outflows of $0.1 billion. Gross flows for the second quarter were $3.5 billion.

 

As of June 30, 2018, Victory Capital offered 71 investment strategies through its nine autonomous Investment Franchises and Solutions Platform. The table below presents outperformance against benchmarks by AUM and strategies as of June 30, 2018.

 

		Trailing		Trailing		Trailing		Trailing
		1-Year		3-Years		5-Years		10-Years
Percentage of AUM Outperforming Benchmark		83%		69%		80%		83%
Percentage of Strategies Outperforming Benchmark		74%		67%		71%		72%

 

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Second Quarter of 2018 Compared to First Quarter of 2018

 

For the quarter ended June 30, 2018, GAAP net income increased 78% to $18.7 million, or $0.26 per diluted share, compared to GAAP net income of $10.5 million, or $0.16 per diluted share, for the first quarter of 2018. GAAP operating margin was 28.4% for the quarter compared to 26.0% for the first quarter of 2018. Adjusted Net Income with tax benefit increased 13% to $29.9 million, or $0.41 per diluted share comprised of $0.37 per diluted share in Adjusted Net Income and $0.04 per diluted share in tax benefit, compared to $26.4 million, or $0.40 per diluted share comprised of $0.35 per diluted share in Adjusted Net Income and $0.05 per diluted share in tax benefit, for the first quarter of 2018.

 

Adjusted EBITDA and Adjusted EBITDA margin were $40.7 million and 39.0%, respectively, for the second quarter of 2018, compared to $39.8 million and 37.9% in the first quarter of 2018. Net Income, Adjusted Net Income and Adjusted EBITDA increased due to operational efficiencies, one-time costs associated with the debt refinancing recognized in the first quarter and, specific to Net Income and Adjusted Net Income, lower interest expense in the second quarter of 2018 as a result of refinancing activities and debt pre-payments.

 

·                 Revenue was $104.4 million, a decline from $105.0 million for the first quarter of 2018 due to a slight decline in average AUM and a decrease in the realized fee rate.

·                 Operating expenses declined to $74.7 million, compared to $77.7 million in the first quarter of 2018 due to operational efficiencies and one-time costs associated with the debt refinancing recognized in the first quarter.

 

Second Quarter of 2018 Compared to Second Quarter of 2017

 

For the quarter ended June 30, 2018, GAAP net income was $18.7 million, or $0.26 per diluted share, compared to $2.4 million, or $0.04 per diluted share, in the second quarter of 2017. GAAP operating margin increased to 28.4% for the quarter from 19.3% for the second quarter of 2017. Adjusted Net Income with tax benefit increased 59% to $29.9 million, or $0.41 per diluted share comprised of $0.37 per diluted share in Adjusted Net Income and $0.04 per diluted share in tax benefit in the second quarter of 2018, compared to $18.8 million, or $0.32 per diluted share comprised of $0.24 per diluted share in Adjusted Net Income and $0.08 per diluted share in tax benefit, in the second quarter of 2017.

 

Adjusted EBITDA and Adjusted EBITDA margin were $40.7 million and 39.0%, respectively, for the second quarter of 2018, compared to $36.2 million and 35.9%, respectively, for the second quarter a year ago. Net Income, Adjusted Net Income and Adjusted EBITDA increased due to higher revenue coupled with operational efficiencies, the successful integration of RS Investments and, specific to Net Income and Adjusted Net Income, lower interest expense in the second quarter of 2018 as a result of refinancing activities and debt pre-payments.

 

·                 Revenue increased $3.5 million to $104.4 million, compared to $100.9 million for the second quarter of 2017, due to higher average AUM, partially offset by a decrease in the realized fee rate due to asset mix.

·                 Operating expenses decreased 8% to $74.7 million, compared to $81.5 million in the second quarter of 2017, primarily due to operational efficiencies and the successful integration of RS Investments.

 

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

 

For the six months ended June 30, 2018, GAAP net income was $29.2 million, or $0.42 per diluted share, compared to $6.8 million, or $0.11 per diluted share, for the comparable six months of 2017. GAAP operating margin increased to 27.2% for the six months ended June 30, 2018 from 19.3% for six months ended June 30, 2017. Adjusted Net Income with tax benefit increased 53% to $56.3 million, or $0.81 per diluted share comprised of $0.72 per diluted share in Adjusted Net Income and $0.09 per diluted share in tax benefit for the six months ended June 30, 2018, compared to $36.7 million, or $0.62 per diluted share comprised of $0.46 per diluted share in Adjusted Net Income and $0.16 per diluted share in tax benefit, for the six months ended June 30, 2017.

 

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Adjusted EBITDA and Adjusted EBITDA margin were $80.5 million and 38.4%, respectively, for the six months ended June 30, 2018, compared to $69.8 million and 34.6%, respectively, for the comparable six months a year ago. Net Income, Adjusted Net Income and Adjusted EBITDA increased due to higher revenue coupled with operational efficiencies, the successful integration of RS Investments and, specific to Net Income and Adjusted Net Income, lower interest expense in the second quarter of 2018 as a result of refinancing activities and debt pre-payments which were partially offset by one-time write-offs of debt issuance and debt discount costs.

 

·      Revenue increased $7.8 million to $209.4 million for the six months ended June 30, 2018, compared to $201.6 million for the six months ended June 30, 2017, due to higher average AUM, partially offset by a decrease in the realized fee rate due to asset mix.

·      Operating expenses for the six months ended June 30, 2018 decreased 6% to $152.4 million, compared to $162.6 million for the six months ended June 30, 2017, primarily due to operational efficiencies and the successful integration of RS Investments.

 

Balance Sheet / Capital Management

 

Cash and cash equivalents were $15.2 million at June 30, 2018, compared to $12.9 million at December 31, 2017. During the quarter, the Company pre-paid $23.0 million of debt with cash on hand and increased its revolving credit facility to $100.0 million. The term loan balance at June 30, 2018 was $300.0 million, a 7% reduction during the quarter.  The $100.0 million revolving credit facility had $100.0 million undrawn as of June 30, 2018.

 

Subsequent to quarter-end, the Company paid down an additional $20.0 million of debt, bringing its term loan balance to $280.0 million at August 7, 2018.

 

On May 22, 2018, the Company announced a $15.0 million share repurchase program of Class A Common Stock effective through December 31, 2019.  During the quarter, the Company repurchased 66,112 shares at an average price of $10.89 per share for a total of $720,259.

 

 

Conference Call, Webcast and Slide Presentation

 

The Company will host a conference call and webcast at 10:00 a.m. Eastern Time today, August 7, 2018, to discuss its financial results. Analysts and investors may participate in the question-and-answer session. The call can be accessed via telephone at (866) 465-5145 (domestic) or (409) 220-9945 (international).  Please reference the Victory Capital Conference Call. A recorded replay of the conference call will be available shortly after the conclusion of the live call and can be accessed through August 21, 2018 by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international), and enter the Conference ID Number 2391246.

 

A slide presentation relating to the second quarter 2018 results will be accessible prior to the scheduled conference call. The slide presentation and webcast of the conference call can be accessed on the Events and Presentations page of the Company’s investor relations website at https://ir.vcm.com.

 

 

About Victory Capital

 

Victory Capital is a global investment management firm operating a next-generation, integrated multi-boutique business model with $62.3 billion in assets under management as of June 30, 2018.

 

Victory Capital’s differentiated model is comprised of nine Investment Franchises, each with an independent culture and investment approach. Additionally, the Company offers a rules-based Solutions Platform, featuring the VictoryShares ETF brand, as well as custom and multi-asset class solutions. The Company’s Investment Franchises and Solutions Platform are supported by a centralized distribution, marketing and operational environment, in which the investment professionals can focus on the pursuit of investment excellence.

 

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Victory Capital provides institutions, financial advisors and retirement platforms with a variety of asset classes and investment vehicles, including separately managed accounts, collective trusts, mutual funds, ETFs, UCITs and UMA/SMA vehicles.

 

For more information, please visit www.vcm.com.

 

 

FORWARD-LOOKING STATEMENTS

 

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “expect,” “aim,” “intend,” “may,” “anticipate,” “assume,” “budget,” “continue,” “estimate,” “future,” “objective,” “outlook,” “plan,” “potential,” “predict,” “project,” “will,” “can have,” “likely,” “should,” “would,” “could” and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Victory Capital’s control, as discussed in Victory Capital’s filings with the SEC, that could cause Victory Capital’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements.

 

Although it is not possible to identify all such risks and factors, they include, among others, the following: reductions in AUM based on investment performance, client withdrawals, difficult market conditions and other factors; the nature of the Company’s contracts and investment advisory agreements; the Company’s ability to maintain historical returns and sustain its historical growth; the Company’s dependence on third parties to market its strategies and provide products or services for the operation of its business; the Company’s ability to retain key investment professionals or members of its senior management team; the Company’s reliance on the technology systems supporting its operations; the Company’s ability to successfully acquire and integrate new companies; the concentration of the Company’s investments in long-only small- and mid-cap equity and U.S. clients; risks and uncertainties associated with non-U.S. investments; the Company’s efforts to establish and develop new teams and strategies; the ability of the Company’s investment teams to identify appropriate investment opportunities; the Company’s ability to limit employee misconduct; the Company’s ability to meet the guidelines set by its clients; the Company’s exposure to potential litigation (including administrative or tax proceedings) or regulatory actions; the Company’s ability to implement effective information and cyber security policies, procedures and capabilities; the Company’s substantial indebtedness; the potential impairment of the Company’s goodwill and intangible assets; disruption to the operations of third parties whose functions are integral to the Company’s ETF platform; the Company’s determination that Victory Capital is not required to register as an “investment company” under the 1940 Act; the fluctuation of the Company’s expenses; the Company’s ability to respond to recent trends in the investment management industry; the level of regulation on investment management firms and the Company’s ability to respond to regulatory developments; the competitiveness of the investment management industry; the dual class structure of the Company’s common stock; the level of control over the Company retained by Crestview GP; the Company’s status as an emerging growth company and a controlled company; and other risks and factors listed under “Risk Factors” and elsewhere in the Company’s filings with the SEC.

 

Such forward-looking statements are based on numerous assumptions regarding Victory Capital’s present and future business strategies and the environment in which it will operate in the future. Any forward-looking statement made in this press release speaks only as of the date hereof. Except as required by law, Victory Capital assumes no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

 

 

INVESTOR RELATIONS WEBSITE

 

Victory Capital may use the Investor Relations section of its website, https://ir.vcm.com, to disclose material information to investors and the marketplace as a means of disclosing material, non-public information and for complying with disclosure obligations under Regulation Fair Disclosure (“Reg FD”).  Victory Capital encourages investors, the media and other interested parties to visit its investor relations website regularly.

 

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Contacts

Investors:

Lauren Crawford, 310-622-8239

lcrawford@finprofiles.com

 

Media:
Tricia Ross, 310-622-8226

tross@finprofiles.com

 

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Victory Capital Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(unaudited; in thousands except shares)

 

		For the Three Months Ended									For the Six Months Ended
		June 30,			March 31,			June 30,			June 30,			June 30,
		2018			2018			2017			2018			2017
Revenue
Investment management fees		$	88,998		$	89,130		$	84,474		$	178,128		$	168,589
Fund administration and distribution fees		15,401			15,834			16,460			31,235			33,006
Total revenue		104,399			104,964			100,934			209,363			201,595
Expenses
Personnel compensation and benefits		37,140			36,803			35,025			73,943			70,675
Distribution and other asset-based expenses		24,127			25,161			26,544			49,288			53,425
General and administrative		7,088			9,056			8,261			16,144			17,182
Depreciation and amortization		5,931			6,412			8,131			12,343			16,285
Change in value of consideration payable for acquisition of business		(4)			-			(25)			(4)			(25)
Acquisition-related costs		(5)			-			228			(5)			591
Restructuring and integration costs		438			264			3,331			702			4,461
Total operating expenses		74,715			77,696			81,495			152,411			162,594
Income from operations		29,684			27,268			19,439			56,952			39,001
Operating margin		28.4%			26.0%			19.3%			27.2%			19.3%
Other income (expense)
Interest income and other income/(expense)		8			(37)			(1,914)			(29)			(1,569)
Interest expense and other financing costs		(4,706)			(7,092)			(13,843)			(11,798)			(26,471)
Loss on debt extinguishment		-			(6,058)			-			(6,058)			-
Total other income (expense), net		(4,698)			(13,187)			(15,757)			(17,885)			(28,040)
Income before income taxes		24,986			14,081			3,682			39,067			10,961
Income tax expense		(6,311)			(3,557)			(1,328)			(9,868)			(4,194)
Net income		$	18,675		$	10,524		$	2,354		$	29,199		$	6,767
Earnings per share - basic		$	0.27		$	0.17		$	0.04		$	0.45		$	0.12
Earnings per share - diluted		0.26			0.16			0.04			0.42			0.11
Weighted average shares outstanding - basic		67,948,732			61,599,057			54,825,386			64,791,435			54,819,604
Weighted average shares outstanding - diluted		72,135,290			66,283,621			58,985,367			69,352,895			58,872,192
Dividends declared per share		$	-		$	-		$	-		$	-		$	2.19

 

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Victory Capital Holdings, Inc. and Subsidiaries

Reconcilation of GAAP to Non-GAAP Measures

(unaudited; in thousands except shares)

 

		For the Three Months Ended									For the Six Months Ended
		June 30,			March 31,			June 30,			June 30,			June 30,
		2018			2018			2017			2018			2017
Net income		$	18,675		$	10,524		$	2,354		$	29,199		$	6,767
GAAP income tax expense		(6,311)			(3,557)			(1,328)			(9,868)			(4,194)
Income before taxes		$	24,986		$	14,081		$	3,682		$	39,067		$	10,961
Interest expense		4,229			8,094			12,757			12,323			24,353
Depreciation		736			736			893			1,472			1,808
Other business taxes		443			375			390			818			840
GAAP amortization of acquisition-related intangibles		5,195			5,676			7,238			10,871			14,477
Stock-based compensation		3,968			3,322			3,651			7,290			5,952
Acquisition, restructuring and exit costs		560			518			5,195			1,078			7,798
Debt issuance costs		361			6,702			1,914			7,063			2,828
Pre-IPO governance expenses		(3)			141			312			138			600
Earnings/losses from equity method investments		202			137			173			339			173
Adjusted EBITDA		$	40,677		$	39,782		$	36,205		$	80,459		$	69,790
Adjusted EBITDA margin		39.0%			37.9%			35.9%			38.4%			34.6%
Net income		$	18,675		$	10,524		$	2,354		$	29,199		$	6,767
Adjustment to reflect the operating performance of the Company
Other business taxes		443			375			390			818			840
GAAP amortization of acquisition-related intangibles		5,195			5,676			7,238			10,871			14,477
Stock-based compensation		3,968			3,322			3,651			7,290			5,952
Acquisition, restructuring and exit costs		560			518			5,195			1,078			7,798
Debt issuance costs		361			6,702			1,914			7,063			2,828
Pre-IPO governance expenses		(3)			141			312			138			600
Tax effect of above adjustments		(2,631)			(4,183)			(7,106)			(6,814)			(12,348)
Adjusted net income		$	26,568		$	23,075		$	13,948		$	49,643		$	26,914
Adjusted net income per diluted share		$	0.37		$	0.35		$	0.24		$	0.72		$	0.46
Tax benefit of goodwill and acquired intangibles		$	3,320		$	3,320		$	4,901		$	6,640		$	9,792
Tax benefit of goodwill and acquired intangibles per diluted share		$	0.04		$	0.05		$	0.08		$	0.09		$	0.16
Adjusted net income with tax benefit		$	29,888		$	26,395		$	18,849		$	56,283		$	36,706
Adjusted net income with tax benefit per diluted share		$	0.41		$	0.40		$	0.32		$	0.81		$	0.62

 

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Victory Capital Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except for shares)

 

 

 

(1)  Balance at June 30, 2018 is shown net of unamortized loan discount and debt issuance costs in the amount of $12.1 million.  The gross amount of the debt outstanding was $300.0 million.

 

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Victory Capital Holdings, Inc. and Subsidiaries

Assets Under Management

(unaudited; in millions)

 

		For the Three Months Ended									% Change from
		June 30,			March 31,			June 30,			March 31,		June 30,
		2018			2018			2017			2018		2017
Beginning assets under management		$	60,855		$	61,771		$	56,622		-1%		7%
Gross client cash inflows		3,521			3,685			3,953			-4%		-11%
Gross client cash outflows		(3,623)			(4,318)			(4,554)			-16%		-20%
Net client cash flows		(102)			(633)			(601)			-84%		-83%
Market appreciation (depreciation)		1,503			(275)			952			n/m		58%
Net transfers		-			(8)			-			n/m		n/m
Ending assets under management		62,256			60,855			56,973			2%		9%
Average assets under management		61,617			62,020			56,784			-1%		9%
Net client cash flows excluding Diversified Equity		(102)			(633)			(314)			-84%		-68%

 

 

		For the Six Months Ended						% Change from
		June 30,			June 30,			June 30,
		2018			2017			2017
Beginning assets under management		$	61,771		$	54,965		12%
Gross client cash inflows		7,205			8,679			-17%
Gross client cash outflows		(7,940)			(9,665)			-18%
Net client cash flows		(735)			(986)			-25%
Market appreciation (depreciation)		1,228			2,994			-59%
Net transfers		(8)			-			n/m
Ending assets under management		62,256			56,973			9%
Average assets under management		61,819			56,531			9%
Net client cash flows excluding Diversified Equity		(735)			(368)			100%

 

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Victory Capital Holdings, Inc. and Subsidiaries

Assets Under Management by Asset Class

(unaudited; in millions)

 

For the Three Months Ended		By Asset Class
		U.S. Mid Cap Equity			U.S. Small Cap Equity			Fixed Income			U.S. Large Cap Equity			Global / Non-U.S. Equity			Solutions			Commodity			Other			Total
June 30, 2018
Beginning assets under management		$	24,205		$	15,095		$	7,311		$	4,635		$	4,334		$	3,563		$	1,298		$	414		$	60,855
Gross client cash inflows		1,125			867			303			103			669			381			46			27			3,521
Gross client cash outflows		(1,422)			(745)			(652)			(287)			(182)			(169)			(133)			(33)			(3,623)
Net client cash flows		(297)			122			(349)			(184)			487			212			(87)			(6)			(102)
Market appreciation (depreciation)		558			773			16			113			(116)			40			80			39			1,503
Net transfers		19			(19)			-			13			-			-			-			(13)			-
Ending assets under management		24,485			15,971			6,978			4,577			4,705			3,815			1,291			434			62,256
March 31, 2018
Beginning assets under management		$	25,185		$	15,308		$	7,551		$	4,789		$	4,105		$	3,028		$	1,419		$	386		$	61,771
Gross client cash inflows		1,203			776			394			55			443			606			127			81			3,685
Gross client cash outflows		(2,080)			(922)			(640)			(211)			(220)			(77)			(146)			(22)			(4,318)
Net client cash flows		(877)			(146)			(246)			(156)			223			529			(19)			59			(633)
Market appreciation (depreciation)		(103)			(67)			6			3			14			(34)			(102)			8			(275)
Net transfers		-			-			-			(1)			(8)			40			-			(39)			(8)
Ending assets under management		24,205			15,095			7,311			4,635			4,334			3,563			1,298			414			60,855
June 30, 2017
Beginning assets under management		$	21,555		$	14,556		$	7,756		$	5,285		$	3,482		$	1,970		$	1,770		$	248		$	56,622
Gross client cash inflows		2,307			652			387			69			155			299			70			14			3,953
Gross client cash outflows		(1,841)			(1,036)			(486)			(523)			(303)			(56)			(275)			(34)			(4,554)
Net client cash flows		466			(384)			(99)			(454)			(148)			243			(205)			(20)			(601)
Market appreciation (depreciation)		369			281			122			-			271			48			(159)			20			952
Net transfers			-			-			(71)			(6)			-			(34)			15			96		-
Ending assets under management		22,390			14,453			7,708			4,825			3,605			2,227			1,421			344			56,973

 

11

 

Victory Capital Holdings, Inc. and Subsidiaries

Assets Under Management by Asset Class

(unaudited; in millions)

 

For the Six Months Ended		By Asset Class
		U.S. Mid Cap Equity			U.S. Small Cap Equity			Fixed Income			U.S. Large Cap Equity			Global / Non-U.S. Equity			Solutions			Commodity			Other			Total
June 30, 2018
Beginning assets under management		$	25,185		$	15,308		$	7,551		$	4,789		$	4,105		$	3,028		$	1,419		$	386		$	61,771
Gross client cash inflows		2,328			1,643			696			158			1,113			986			173			108			7,205
Gross client cash outflows		(3,502)			(1,667)			(1,291)			(498)			(402)			(245)			(279)			(56)			(7,940)
Net client cash flows		(1,174)			(24)			(595)			(340)			711			741			(106)			52			(735)
Market appreciation (depreciation)		455			706			22			116			(103)			6			(22)			48			1,228
Net transfers		19			(19)			-			12			(8)			40			-			(52)			(8)
Ending assets under management		24,485			15,971			6,978			4,577			4,705			3,815			1,291			434			62,256
June 30, 2017
Beginning assets under management		$	20,083		$	14,090		$	7,726		$	5,921		$	3,460		$	1,602		$	1,882		$	202		$	54,965
Gross client cash inflows		4,516			1,901			890			137			363			646			178			48			8,679
Gross client cash outflows		(3,714)			(2,237)			(1,074)			(1,234)			(775)			(103)			(480)			(48)			(9,665)
Net client cash flows		802			(336)			(184)			(1,097)			(412)			543			(302)			-			(986)
Market appreciation (depreciation)		1,504			699			239			7			557			116			(174)			46			2,994
Net transfers		1			-			(73)			(6)			-			(34)			15			97			-
Ending assets under management		22,390			14,453			7,708			4,825			3,605			2,227			1,421			344			56,973

 

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