Global asset manager Victory Capital is set to acquire full ownership of First Eagle Investments, which manages $222bn (£162.9bn) in assets, as the firm looks to scale its collateralised loan obligation (CLO) and alternative credit platform.

The move is expected to make Victory one of the largest publicly traded traditional asset managers in the US, with $571bn in assets.

Victory has entered into an agreement to acquire 100 per cent of the New York-headquartered manager from private equity firm Genstar Capital and First Eagle employees.

It is set to acquire the manager for $7bn, comprising $4.4bn in cash and $2bn in newly issued Victory Capital equity.

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David Brown, chairman and chief executive of Victory Capital, said the move marks the “next chapter in the evolution” of the firm.

“First Eagle is a premier global asset manager, with a diversified product lineup spanning global multi-asset, equities, fixed income, and a scaled alternatives platform that includes CLOs and alternative credit,” said Brown.

“This transaction enriches Victory Capital’s talent pool, gives us additional scale to invest even more in our overall platform, and amplifies our distribution depth and breadth in the US, as well as outside the US through our strategic partnership with Amundi.”

As part of the transaction, First Eagle will be brought into Victory Capital, but will retain its brand, investment autonomy and existing investment processes, the firms said.

Victory Capital said that, as part of the transaction, First Eagle’s $41bn CLO and alternative credit business will become part of its broader alternatives offering once the deal is completed.

“Clients will… benefit from the materially larger distribution footprint of the combined entity,” said Mehdi Mahmud, president and chief executive of First Eagle. “I expect the combined company’s scale, status as a publicly traded company, and ability to invest in the business for the long term will be a source of strength in the years ahead.”

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