David C. Brown guides Victory Capital with a steady hand

If you think you can rush David C. Brown to get a deal done, you’ve got the wrong guy.

“I have this saying that you only do deals with people who you can work with without paper or attorneys,” says Brown, chairman and CEO at Victory Capital Holdings Inc. “This is a transparent industry, and it brings out the best in some people and is really challenging for others.”

Victory Capital is a global investment management firm with nine autonomous investment franchises, each with an independent culture and investment approach.

“What they’re doing every day is coming in and spending all their time managing money, creating portfolios, doing research and then leveraging a centralized operating and distribution platform,” Brown says. “We manage money for individuals, institutions, union plans, pensions, sovereign wealth funds and everything in between. Everything restarts every day. So if you have a bad day, you get tomorrow and it starts over. If you have a good day, you have to go back tomorrow and prove yourself all over again.”

Smart Business spoke with Brown about Victory Capital’s investment strategy, last year’s pivotal acquisition of USAA Asset Management Co. and the role that Cleveland and San Antonio play in the firm’s success.

Take ownership

Victory Capital became an independent firm in 2013 when New York-based Crestview Partners teamed with employees to execute a $246 million management buyout from KeyCorp. At the time, the firm had $22.1 billion in assets under management, a number that grew to $151.8 billion as of Dec. 31, through both organic means and acquisitions.

“Key was a wonderful owner,” Brown says. “They are still a client of ours, and we’re a client of theirs. We’re sitting in a building that we lease from them. It got to a mutual understanding that our business would be better served being independent and having different ownership.”

The value Brown and his team place on employee ownership played a key role in the buyout deal getting done.

“It’s ownership in our business, ownership in our products,” Brown says. “The reason ownership is so important is it aligns us with our clients and it allows our clients to trust us. Getting to that level was really impossible under Key’s ownership because of the way the company was structured. So it was just a natural evolution at that time. The success we’ve had, a big part of that is being able to have this ownership.”

Brown uses this fact to drive the point home: Victory Capital’s employee base has more than $125 million of its own money invested in the firm’s products.

“So we’re clients with our clients,” Brown says. “And we have a long-term view. When I think about our company, I can’t talk much about it without talking about that. It’s an important part of who we are.”

Brown came out of school as a CPA and initially worked as an accountant and consultant to the investment management industry. He gravitated to his current line of work, which fits him like a glove.

“This industry is hypercompetitive and moves really quickly,” Brown says. “Whatever is happening in current events, whatever is happening in the world, you have to be up to speed on it because it impacts the markets. I really like that I get to interact with some of the smartest and most successful people in the world.”

Good results are a product of diligence, discipline and perspective, Brown says.

“One of the things that I really focus on is breaking big projects down into little things,” he says. “Every time we’ve done a transaction, every time we’ve done an acquisition, we’ve learned. We take a step back and say, ‘What did we learn here? What should we have done better? What did we do well? What won’t we do next time?’”

Victory Capital has worked diligently to build a network of investment bankers and other leaders of similar organizations to inform its strategic direction.

“We have a pipeline of opportunities,” Brown says. “Many of them have been developed through our leadership and going out into the industry and meeting other leaders of companies. We have an acquisition strategy that is well thought out, and we’ve been very disciplined with it.”

Brown typically gets up each at 4 a.m. to begin his workday and catch up on what he missed in some other corner of the world while he was sleeping.

“This industry never stops,” Brown says. “We’re scored every single day, just like an athlete or a team would be. The box scores in the newspaper are our investment results, and we look at them every day.”

It’s a small world

Last summer, Victory Capital completed a deal to buy USAA Asset Management Co. The deal includes USAA’s mutual fund and exchange-traded fund business, as well as its 529 College Savings Plan.

“The USAA acquisition for us was absolutely transformational,” Brown says. “It more than doubled the size of our assets and doubled our business. It actually got us into a different part of our industry, the direct-to-consumer segment. It also gave us a great opportunity to serve the military and their families and work with USAA, which is just a tremendous organization.”

The deal also resulted in Victory Capital moving its headquarters from Cleveland to San Antonio, where USAA was based.

“We’re still going to have the same presence we’ve always had in Cleveland,” Brown says. “We just felt that it was a natural evolution for us to name San Antonio as the headquarters. As we think about recruiting with all of the population growth there and some of the attractiveness of the city, it made a lot of sense.”

In terms of growth, San Antonio has seen its population grow from 1.32 million in 2010 to 1.53 million in 2018, according to the U.S. Census Bureau. Conversely, Census data shows Cleveland’s population has dipped from nearly 397,000 people in 2010 to about 384,000 in 2018. Despite these trends, Brown says Cleveland city officials continue to work hard to get things turned around.

“I’ve been here for 15 years and I’ve seen the evolution of where we were in the early 2000s to where we are today,” Brown says. “Cleveland has a lot to offer with the health care system we have here and it being a very easy place to raise a family. I’m not sure that I could point to one thing and say, ‘Hey, they should be doing more of this.’ I just think in general, not just in Cleveland, cities need to continue to engage business leaders and make sure that when these elected officials are thinking about business, they’re thinking about making their cities business-friendly.”

Beyond that, the importance of where a company is based has diminished in the 21st century.

“I can’t think of it as all of my employees in one office and everybody needs to be in that office all the time,” Brown says. “You really have to take a step back and say, how do you create a work platform for employees where they can be anywhere in the world or anywhere in the country and still engage and get their job done? The way you do that is through technology.”

Brown cites the trading desk at Victory Capital’s Cleveland office as an example of the shrinking world.

“All of the trades go through here, but none of the investment teams are actually in this office,” he says. “So all of the interaction is through digital, through online and through the trading system we have. They’re pushing trades and they are interacting within seconds, yet they don’t sit in the same office or in the same city.”

Evaluate the risk

Brown expects to continue traveling extensively between Cleveland and San Antonio, as well as other Victory Capital locations. Wherever he goes, he’s confident that dealmaking will continue to be a hot topic.

“If you’re not buying and you’re not selling, you’re thinking about it and evaluating,” Brown says. “If you don’t take risks, there’s probably no reward. But you have to make sure that you’re going to be appropriately rewarded for the risk you’re taking.”

In late December, Victory Capital announced that its VictoryShares exchange-traded fund platform had crossed the $5 billion mark in assets under management. Victory Capital entered the ETF business in 2015, and its platform uses a rules-based approach in its effort to outperform traditional market cap-weighted indexing strategies.

The ability to continuously identify and execute deal opportunities has become even more important in today’s economy.

“You need to be up to speed with what’s happening, especially in our industry,” Brown says. “It’s really important as we go into the later part of this growth cycle, when there’s predicted to be a lot of M&A activity. Every transaction we do, we’re looking to better our company and better position our company. That’s where it really starts, and that’s where it ends.”


  • Be willing to make a big change.
  • Adapt to the needs of your employees.
  • Always be ready to jump on a dealmaking opportunity.

The File

Name: David C. Brown

Title:  Chairman and CEO

Company: Victory Capital Holdings Inc.

Education: Bachelor of arts degree, political science, Ursinus College, Collegeville, Pennsylvania; MBA, Case Western Reserve University

Brown on client expectations: Clients are hiring us to manage their money and get returns that are typically above the benchmark or that meet a certain investment objective. When you’re able to meet those goals and objectives, you keep your clients. If you’re not performing well from an investment perspective, you’re going to struggle to keep your clients.

Brown on the USAA deal: It was a highly competitive transaction because it was a desired property. It required a lot of personal touch by me and some of the other leaders of the management team, given how important this was to USAA and given that we still have the rights to use the USAA brand and to serve their members. We really feel honored just to be associated with them and to have the ability to buy the business.

Brown on dealmaking: If you’re able to work something out face to face across the table, those are the people you want to do deals with. No matter what the deal is, you’re always doing the deal with a person, so make sure you’re doing it with the right person. Also, you can never pay too little for a bad deal and you probably can’t pay too much for a good deal.