Munder, Victory Capital to combine: Sources

Crestview Partners looks like it will be merging Munder Capital Management with another of its portfolio companies, two sources told peHUB.

Crestview had tried to sell Munder last year but pulled the auction after receiving low bids. Birmingham, Michigan-based Munder now will be combined with Victory Capital Management, a Cleveland asset manager, the sources said.

“The two platforms do overlap, and it would probably be a stronger company combined,” one banker source told peHUB.

Victory manages or advises more than $18 billion for its clients as of March 31, according to the firm website. This is down from $22.1 billion in assets under management as of Dec. 31, 2012. Also, as of the end of 2012, Victory had 144 employees.

Victory is the former investment management subsidiary of KeyCorp, the Cleveland banking company. Crestview acquired Victory last year for $246 million.

Crestview’s acquisition of Munder dates back to January 2007, when it completed its buy of Munder from Comerica, a bank then based in Detroit, in a deal valued at $302 million. Munder’s assets under management have dropped to about $18 billion from $27.1 billion in 2006, one of the sources said.

It was unclear which fund Crestview used for either the Munder or Victory deals. Munder appears to be a Fund II acquisition while Victory could be a Fund II or Fund III investment.

Crestview is currently out marketing for its third pool, which has a $3 billion target. The firm’s second fund collected $2.4 billion in November 2007, while Crestview’s first fund came in at about $1.5 billion in 2004.

The second fund generated a net IRR of 16.5 percent as of Sept. 30, according to the California Public Employees’ Retirement System, an investor. Performance data for Fund I was not available.

Executives at Crestview declined comment. Munder and Victory did not return calls or messages for comment.

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