Victory Capital Announces New $200 Million Share Repurchase Program

Rhea-AI Summary

Victory Capital (NASDAQ: VCTR) has announced a new $200 million share repurchase program running through December 31, 2026, marking the largest buyback initiative in the company's history. This announcement follows the completion of their previous $100 million stock repurchase program approved in Q4 2023. The company will execute purchases through open market or private transactions, with timing and volume dependent on factors including share price, trading volume, and market conditions. CEO David Brown emphasized that this program aligns with their growth strategy, supporting earnings and cash flow growth while rewarding shareholders through both buybacks and dividends.

Positive

• Largest share repurchase program in company history at $200 million
• Successfully completed previous $100 million buyback program
• Demonstrates strong cash flow generation capability
• Flexible capital allocation strategy supporting both growth and shareholder returns

Negative

• Significant cash commitment may limit funds available for other strategic initiatives

Insights

Financial Analyst

The announcement of a $200 million share repurchase program, Victory Capital's largest to date, demonstrates robust financial health and confidence in future performance. The completed $100 million prior authorization in Q4 2023 shows strong execution of capital return initiatives. Share buybacks typically support stock price by reducing share count and increasing EPS. With a market cap of $4 billion, this program represents approximately 5% of outstanding shares. The flexible timeline through 2026 allows strategic deployment based on market conditions. Notably, the company's dual approach of dividends and buybacks indicates a balanced capital return strategy. For an asset manager like VCTR, maintaining strong cash flows while returning capital signals operational efficiency and market strength. This move could potentially boost shareholder value through improved earnings per share metrics and increased demand for the stock.

Market Research Analyst

The strategic timing of this buyback announcement amid market volatility provides VCTR with significant optionality. The doubled size from the previous program suggests management's view that shares may be undervalued. Asset management firms typically benefit from market appreciation and rising rates and this capital deployment indicates confidence in the business model's resilience. The discretionary nature of the program, allowing for opportunistic purchases, is particularly valuable given current market dynamics. For context, successful execution could enhance ROE metrics and create a price support level. The company's ability to complete the previous $100 million program while maintaining operational flexibility demonstrates strong cash generation capabilities. This moves aligns with industry trends where leading asset managers are increasingly using buybacks to enhance shareholder returns.

SAN ANTONIO--(BUSINESS WIRE)-- Victory Capital Holdings, Inc. (NASDAQ: VCTR) (“Victory Capital” or the “Company”) today announced that its Board of Directors has approved a new common stock repurchase program authorizing the repurchase of up to $200 million of its Common Stock through December 31, 2026.

“This new repurchase program is the largest in our history and allows us to remain flexible and opportunistic with our capital,” said David Brown, Chairman and Chief Executive Officer. “As a growth company, our capital allocation strategy directly supports our strategy for increasing earnings and cash flow. In addition, with increasing cash flow, we can also reward shareholders by returning capital via share repurchases and dividends.”

The Company’s prior $100 million stock repurchase authorization, approved in the fourth quarter of 2023, has been completed.

Under the new program, the Company may purchase its shares from time to time in the open market or in privately negotiated transactions. The amount and timing of the purchases will depend on several factors including the price and availability of the Company's shares, trading volume, capital availability, Company performance and general economic and market conditions. The share repurchase program may be suspended or discontinued at any time.

About Victory Capital

Victory Capital is a diversified global asset management firm with total assets under management of $179.7 billion, and $184.0 billion in total client assets, as of November 30, 2024. The Company employs a next-generation business strategy that combines boutique investment qualities with the benefits of a fully integrated, centralized operating and distribution platform.

Victory Capital provides specialized investment strategies to institutions, intermediaries, retirement platforms and individual investors. With 11 autonomous Investment Franchises and a Solutions Business, Victory Capital offers a wide array of investment products and services, including mutual funds, ETFs, separately managed accounts, alternative investments, third-party ETF model strategies, collective investment trusts, private funds, a 529 Education Savings Plan, and brokerage services.

Victory Capital is headquartered in San Antonio, Texas, with offices and investment professionals in the U.S. and around the world. To learn more please visit www.vcm.com or follow Victory Capital on Facebook, Twitter, and LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241219468070/en/

Investors:

Matthew Dennis, CFA

Chief of Staff

Director, Investor Relations

216-898-2412

mdennis@vcm.com

Media:

Jessica Davila

Director of Global Communications

210-694-9693

Jessica_davila@vcm.com

Source: Victory Capital Holdings, Inc.

FAQ

How much is Victory Capital's new share repurchase program worth?

Victory Capital's new share repurchase program is worth $200 million, representing the largest buyback program in the company's history.

When does VCTR's new share repurchase program expire?

The new share repurchase program runs through December 31, 2026.

How much was Victory Capital's previous share repurchase program?

Victory Capital's previous share repurchase program was $100 million, approved in Q4 2023 and has been completed.

How will Victory Capital execute its new share repurchase program?

Victory Capital may purchase shares from time to time in the open market or through privately negotiated transactions, with timing and volume based on factors including price, trading volume, and market conditions.

What is the purpose of VCTR's new share repurchase program?

The program aims to support Victory Capital's growth strategy, increase earnings and cash flow, while returning capital to shareholders alongside dividend payments.