TimesSquare Capital Management, LLC on Victory Capital Holdings, Inc.
Thesis
TimesSquare viewed Victory Capital’s continuing net inflows and proposed acquisition of First Eagle Investments favorably. The asset manager’s autonomous investment boutiques use shared operating and distribution infrastructure. Strong inflows supported share-price appreciation during the quarter and management indicated the trend persisted. TimesSquare nonetheless trimmed the holding into strength because the valuation already appeared to reflect much of the good news.
“we trimmed the position into strength because we felt much of the good news was reflected in the prevailing valuation”
Key risks
- The prevailing valuation already incorporated much of the positive news.
- Continued performance depends on sustaining the recent client inflows.