Deals & People April 16, 2024

Ascensus to Acquire Vanguard’s Individual 401(k) Business

Vanguard to shed its individual 401(k), Multi-SEP, and SIMPLE IRA Plans.

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Ascensus has signed a deal to acquire Vanguard’s Individual 401(k), Multiple Participant SEP and SIMPLE IRA Plans division. The acquisition is projected to finalize in the third quarter of 2024; the firms did not disclose terms.

As part of the agreement, Ascensus will take on the responsibilities of recordkeeping and client servicing for Vanguard’s existing SIMPLE, Multi-SEP and individual 401(k) retirement plans, thereby expanding its total retirement plans managed to nearly 280,000. Ascensus did not provide comment on the number of plans coming over via Vanguard.

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According to Ascensus, retirement plans such as SIMPLE, SEP, and Individual 401(k) are well-suited for small businesses. The individual 401(k) plan, the firm commented, is particularly beneficial for owner-only businesses seeking similar advantages to larger 401(k) plans. Meanwhile, Multi-SEP and SIMPLE IRA Plans provide participants with simplified retirement savings options, minimizing administrative hassles for plan sponsors.

A spokesperson for Ascensus stated that these plans will be served as part of the small business retirement segment, and the firm hopes to have news on a leader for the segment very soon.

“This acquisition offers small business employers continued access to Vanguard’s investment strength and the technology, expertise, and operational excellence that clients have come to expect from Ascensus,” Nick Good, Ascensus’s president, said in a statement.

Along with custodial and trustee services, Ascensus will offer recordkeeping, client servicing, transaction processing, tax reporting and additional support. Through the Ascensus platform, plan participants will maintain access to a varied selection of Vanguard mutual funds. Additionally, Vanguard will provide a one-person SEP IRA option for sole proprietors. Vanguard’s other retirement offerings are not part of the agreement.

“The breadth and nuance of small business plan administration increasingly requires deep specialization,” Armond Mosley, principal and head of Vanguard’s self-directed business, said in a statement. “We know that clients in these plans will benefit from Ascensus’ longstanding commitment to helping these small business clients meet their retirement objectives.”

The announcement comes just weeks after Ascensus announced plans to acquire recordkeeping for more than 2,300 retirement plans from Mutual of Omaha’s 401(k) recordkeeping business.

Ascensus added the fifth-most new defined contribution plans in 2022 at 7,561 new plans, and Vanguard booked the tenth most new plans at 3,458, according to the most recent data from PLANSPONSOR, which is a sister publication of PLANADVISER. The top three for new plans were Paychex Inc. (23,246), ADP Inc. (22,589) and Guideline Inc.(12,472).

Vanguard’s recordkeeping business is the third-largest in the country at $523.5 billion in total 401(k) assets as of the latest PLANSPONSOR data; Ascensus ranks tenth at $151.8 billion

Deals & People April 16, 2024

Victory to Acquire Amundi’s $104B U.S. Division

The Paris-based asset manager Amundi will cede its U.S. business to Victory in exchange for a 26.1% stake in the Texas-based firm.

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Victory Capital announced Tuesday it has signed a memorandum of understanding to acquire the U.S. business of global asset manager Amundi to gain access to both its U.S. distribution and international clientele.

Victory, which is based in San Antonio, Texas, will be adding Amundi’s $104 billion in assets under management and about 480 employees overseeing a broad range of asset classes offered through investment vehicles, including mutual funds, collective investment trusts and separately managed accounts. Victory will also get a 15-year “exclusive” distribution agreement for Amundi’s U.S.-based channels, including a national defined contribution investment-only sales team.

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In turn, Amundi will receive a 26.1% stake in Victory and access to its U.S. products and clientele.

“The proposed transaction would create a broader U.S. investment platform for clients of both firms, provide Amundi with access to a wider set of U.S.-managed capabilities, and expand worldwide distribution for Victory Capital,” according to the announcement.

The firms said no cash payment will be involved and expect to finalize the deal before the end of Q2 2024. Two Amundi representatives will join Victory Capital’s board after the transaction closes.

“The distribution agreement would immediately position our products for success through Amundi’s extensive and effective distribution channels throughout the world,” David Brown, chairman and CEO of Victory, said in a statement. “Moreover, having Amundi as a strategic shareholder in our firm would strengthen our alignment on the distribution agreement and establish the foundation for an enduring and mutually beneficial long-term relationship.”

Through the deal, Victory will also become the distributor of Amundi’s non-U.S. manufactured products in the U.S. The firms said the transaction is expected to be accretive for shareholders of both firms by increasing adjusted net income and earnings per share.

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