Global active asset manager Janus Henderson Group is set to acquire a majority stake in Victory Park Capital Advisors (VPC), as ABS portfolio managers operators in the private credit space continue a collaboration that sustains liquidity for the sector.
The VPC acquisition is expected to accomplish two primary objectives for Janus: bolster Janus Henderson's securitized credit franchise and ABS expertise, and expand the firm's capabilities in private markets. VPC is expected to add to Janus Henderson's $36.3 billion in securitized assets under management (AUM).
The Janus transaction follows another acquisition, announced in July, as global fintech and consumer lending firm Pagaya Technologies agreed to buy Theorem Technology. That $3 billion transaction bolsters similar missions–deploy technology to fund consumer loans and use securitization in their balance sheet management strategy.
According to Dafina Dunmore, a senior director at Fitch Ratings, asset manager-led transactions targeting asset-based finance (ABF) gained momentum following the regional banking crisis. The underlying pool of assets in these ABF transactions typically comprise consumer and small business loans that were typically the domain of banks.
"The regional banking crisis, and pending regulatory capital changes, fueled the disruption, with banks pulling back on lending, and private lenders stepping in to fill the void," Dunmore said.
Since its founding by Richard Levy and Brendan Carroll, VPC has invested roughly $10.3 billion across more than 220 investments and has about $6 billion in AUM. VPC believes the purchase will allow it to scale faster while diversifying its product offering.
Janus Henderson Group's Chief Executive Officer Ali Dibadj is optimistic about ABC's role in the private capital space. Asset-backed lending has become "a significant market opportunity within private credit," he said, with clients diversifying their private credit exposure outside direct lending. Dibadj added that VPC's investment private credit capabilities and expansive insurance expertise will expand Janus's offerings to its clientele. The VPC addition also helps Janus diversify while adding to its securitized finance expertise.
The acquisition will power VPC's growth, while amplifying its distribution capabilities throughout more geographies, say insiders. VPC's CEO and CIO Levy, said in a statement he believes the purchase will allow VPC to scale faster while diversifying its product offering. It will also expand its "distribution and geographic reach" as well as strengthen its "proprietary origination channels."
VPC's Senior Partner Carroll says the Janus acquisition helps VPC achieve its expansion goals while adding value for its clients by accelerating "product development and cross-selling opportunities."
A developing industry trend
Such transactions are likely to continue, with plenty of incentive on both sides, say industry experts. Traditional asset managers tend to have less experience on the private asset investing side. They usually invest in public stocks and bonds, while alternative investment managers like Blackstone and KKR have large credit teams in place and have grown this part of the business in the last few years.
Consequently, Dunmore said traditional asset managers are now "partnering or acquiring lenders so they can offer this capability," which would take a long time to grow organically and would be quite difficult. Alternative asset managers are also actively partnering with or acquiring portfolios from banks to scale their franchises.
Since deal activity has picked up in 2024, driven by improved market sentiment, alternative asset managers will look to return capital to investors, Dunmore said.
"There is a significant amount of dry powder waiting to be deployed by private capital arms," Dunmore said.
