Janus Henderson has entered into an agreement to acquire a majority stake in US-based global private credit manager, Victory Park Capital (VPC).
The acquisition has been described as “highly synergistic”, building upon Janus Henderson’s US$36.3 billion in securitised assets under management globally.
The acquisition is also expected to enhance Janus Henderson’s position in the global institutional market by leveraging VPC’s longstanding partnerships with global institutional clients, including insurance companies, pensions, endowments, and sovereign wealth funds.
VPC, founded in 2007 and headquartered in Chicago, has approximately US$6 billion in assets under management as of 30 June 2024.
“As we continue to execute on our client-led strategic vision, we are pleased to expand Janus Henderson’s private credit capabilities further with Victory Park Capital,” said Ali Dibadj, CEO of Janus Henderson.
“Asset-backed lending has emerged as a significant market opportunity within private credit, as clients increasingly look to diversify their private credit exposure beyond only direct lending. VPC’s investment capabilities in private credit and deep expertise in insurance align with the growing needs of our clients, further our strategic objective to diversify where we have the right, and amplify our existing strengths in securitised finance.”
Richard Levy, CEO and founder of VPC, said the partnership will assist in VPC’s “next phase of growth”.
“This partnership is a testament to the strength of our established brand in private credit and differentiated expertise, and we believe it will enable us to scale faster, diversify our product offering, expand our distribution and geographic reach, and bolster our proprietary origination channels,” he said.
The acquisition consideration comprises a mix of cash and shares of Janus Henderson common stock and is expected to be neutral-to-accretive to earnings per share in 2025.
It is expected to close in the fourth quarter of 2024 and is subject to customary closing conditions, including regulatory approvals.
With the transaction, Janus Henderson will purchase stakes in VPC from Australian asset manager Pacific Current Group (PAC), who are selling 55 per cent of its 24.9 per cent equity stake in VPC and 22 per cent of its 24.9 per cent of future carried interest entitlements in VPC’s funds yet to be launched.
PAC will receive upfront consideration of US$33.9 million before transaction costs, 75 per cent of which will be in cash and 25 per cent in Janus stock.
It will hold an 11.2 per cent stake in VPC’s management company following the transaction, alongside 19.4 per cent of the carried interest entitlements on new funds.
The firm clarified it could also receive up to an additional US$28.7 million as an earnout payment based on certain VPC gross revenue milestones measured in calendar years 2025 and 2026.
As at 31 December 2023, PAC’s book value for the aggregate VPC investment was US$51.8 million, while its fair value estimate was US$92.8 million, specifically US$63.3 million for the management company and US$29.5 million for the carried interest vehicle.
The acquisition of VPC follows Janus Henderson’s recent announcement that it will acquire the National Bank of Kuwait’s emerging markets private investments team, NBK Capital Partners, which is expected to close later this year.
Upon completion, NBK Wealth’s private investments team will join Janus Henderson as the firm’s new emerging markets private capital division.
