PE-backed Victory Capital wins auction for RS Investments

Victory Capital Inc, backed by Crestview Partners and Reverence Capital Partners, confirmed it is buying RS Investments, ending a months-long auction process.

The Guardian Life Insurance Company of America is the seller. Financial terms weren’t announced, but press reports pegged the sale of RS at up to $275 million.

Buyouts reported in November that Victory Capital had won the auction of RS Investments.

RS, based in San Francisco, is an investment manager with $18.9 billion in assets under management as of November 30. The combined firms are expected to have about $54 billion in AUM once the RS sale closes, a statement said.

David Brown, Victory’s chairman and CEO, will continue in those roles once the RS acquisition is completed.

Guardian Life bought RS in 2006 when the asset manager reportedly had $11.8 billion in AUM. Guardian put RS on the block over the summer, hiring Morgan Stanley to advise on the process. Other bidders included RidgeWorth Investments, which is backed by Lightyear Capital, as well as Lovell Minnick Partners, Buyouts has reported.

The RS sale is yet another win for Reverence Capital Partners. Milton Berlinski co-founded Reverence in 2013. The New York-based private equity firm invests in middle-market financial services companies.

Reverence garnered considerable buzz when it partnered with TA Associates earlier this year to buy Russell Investments from the London Stock Exchange for $1.15 billion. The Russell sale is expected to close in first half of 2016, according to a notice on the Reverence website. Reverence also led a $135 million E round of financing for online lender Kabbage in October.

Both Berlinski and Barry Volpert, Crestview’s CEO, are alums of Goldman Sachs. Berlinski is a founding member of Goldman’s Financial Institutions Group, the Reverence website said. Volpert was a co-founder and ultimately co-COO of Goldman’s global private equity business, his biography said. Volpert retired as a partner from Goldman in 2004 and co-founded Crestview that same year.

Crestview, also of New York, invests in sectors including financial services, healthcare and energy. In February 2015, Crestview closed its third fund at $3.2 billion, surpassing its $3 billion target.

Executives for Crestview declined comment. Reverence couldn’t be reached for comment.

Action Item: Contact Reverence at 212-804-8025

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