Victory Capital Posts Record Sales and First Eagle Deal

The Tip Desk · November 10, 2026 · 4 min read

Long-term net inflows reached a record $11.7 billion in the third quarter as Victory Capital announced a deal to buy First Eagle Investments.

Victory Capital Holdings, Inc. (VCTR) recorded long-term net inflows of $11.7 billion in the third quarter, an all-time high that lifted ending assets under management to $351.9 billion and total client assets to a record $355.5 billion.

The asset manager also posted record long-term gross sales of $30.5 billion, up from $22.1 billion in the second quarter and $18.9 billion in the first quarter. Chairman and Chief Executive Officer David C. Brown said the inflows represented an annualized organic growth rate of approximately 14% and that year-to-date long-term net flows reached $15.4 billion.

Ending AUM rose $9.4 billion from $342.5 billion at June 30, 2026. The company said the increase was primarily due to the $11.7 billion of net inflows, partially offset by $2.2 billion of negative market action.

Brown said the drivers of the sales and flows were broad-based: U.S. intermediary, U.S. institutional and international channels each generated positive long-term net flows. Net flows were positive across numerous asset classes, including fixed income, solutions and global equity, with contributions from multiple investment franchises and the VictoryShares ETF platform.

Investment performance remained a supporting theme. As of September 30, 2026, 60%, 69%, 63% and 77% of AUM outperformed benchmarks over the respective 1-, 3-, 5- and 10-year periods. In addition, 62% of rated mutual fund and ETF AUM had an Overall Morningstar Rating of four or five stars.

Revenue was $396.6 million, down 8.9% from $435.4 million in the second quarter. The company attributed the decline primarily to the crystallization of certain annual fees received in the second quarter and changes in asset-class and client mix, partially offset by higher average AUM. Year over year, revenue increased 9.8% from $361.2 million, which the company said resulted from higher average AUM.

GAAP operating margin contracted 980 basis points to 34.7% from 44.5% in the second quarter, due to the revenue decrease and a $16.2 million increase in acquisition-related costs tied to the First Eagle Investments transaction. GAAP net income declined 34.5% to $91.3 million, or $1.11 a share, from $139.4 million, or $1.68 a share.

Adjusted EBITDA fell $30.6 million to $212.1 million, and the adjusted EBITDA margin contracted 230 basis points to 53.5% from 55.8%. Adjusted net income with tax benefit decreased 10.7% to $163.2 million, or $1.98 a share, from $182.9 million, or $2.21 a share.

Against the year-ago third quarter, adjusted EBITDA increased 11.4% to $212.1 million from $190.5 million, and the adjusted EBITDA margin expanded 80 basis points to 53.5% from 52.7%. Adjusted net income with tax benefit increased 15.5% to $1.98 a share from $1.63 a share. GAAP operating margin contracted 350 basis points to 34.7% from 38.2% a year earlier as variable expenses rose with higher average AUM and First Eagle acquisition costs, partially offset by lower integration costs. GAAP net income decreased 5.4% to $91.3 million from $96.5 million.

In August 2026 the company announced a definitive agreement to acquire First Eagle Investments. It recorded $15.5 million of acquisition-related costs in the quarter. Brown said the deal is transformational and will add size and scale, a larger distribution footprint inside and outside the United States, a global value multi-asset capability, complementary equity and fixed income capabilities, a scaled CLO and alternative credit platform, and a track record of positive net flows. Victory Capital said it expects the transaction to close by the end of the first quarter of 2027, subject to customary closing conditions, including certain regulatory approvals and client consents.

Cash flow from operations was $223.4 million in the quarter. The company returned $81 million to shareholders, including $39 million to repurchase about 0.4 million shares, with the balance paid as dividends. The board declared a regular quarterly cash dividend of $0.50 a share, payable December 23, 2026, to shareholders of record on December 10, 2026. Total debt outstanding was approximately $975 million as of September 30, 2026.