Bloomberg "Anywhere" Remote Login Bloomberg "Terminal" Request a Demo


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

KeyCorp to Sell Victory to Crestview as CEO Targets Buybacks

Feb. 21 (Bloomberg) -- KeyCorp, Ohio’s second-largest bank, agreed to sell its investment-management subsidiary and broker-dealer affiliate to a private-equity fund sponsored by Crestview Partners LLC for $246 million.

The sale includes $201 million in cash and a seller note with an initial face value of $45 million, the Cleveland-based lender said today in a statement. The final value of the note will be determined at the end of this year, according to the statement.

KeyCorp estimates the gain on the sale of its Victory Capital Management unit at $145 million to $155 million, the bank said. The lender, led by Chief Executive Officer Beth E. Mooney, intends to seek regulatory approval to repurchase common stock with proceeds from the sale, which is expected to be completed in the third quarter, according to the statement.

“Victory was a standalone unit,” Thomas Stevens, KeyCorp’s chief administrative officer, said in a phone interview. “There wasn’t significant client overlap. This is to streamline and focus our business on our core relationship strategy.”

KeyCorp slid 0.2 percent to $9.34 at 11:45 a.m. in New York. The shares have gained 16 percent in the past 12 months, compared with the 19 percent advance of the 81-company Standard & Poor’s 500 Financials Index.

Share buybacks are the bank’s third priority for capital usage behind organic growth and dividend increases, Mooney said during a presentation in December. The company repurchased 10.5 million shares in the fourth quarter at an average cost of $8.37 per share.

Cost Cuts

KeyCorp is targeting $150 million to $200 million in cost cuts by the end of this year through branch closings and other expenses as record-low interest rates damp revenue.

After the deal is completed, Victory will operate as an independent firm, and senior management, portfolio managers and other employees will own a “significant amount” of the company’s outstanding equity, Crestview said in a separate statement.

David Brown will become Victory’s CEO and Christopher Ohmacht its president, according to the statement. Both men will be appointed to the new company’s board of directors along with two representatives from Crestview and three independent directors, the firm said.

Victory managed and advised about $22.1 billion in equity and fixed-income assets for individual and institutional clients as of Dec. 31, according to Crestview’s statement. The firm will be based in Cleveland with offices in New York, Cincinnati, Denver and Tampa, Florida.

New Fund

Crestview, based in New York, focuses on investments in financial services, media and cable, health care and energy companies, primarily in the U.S. The firm, started in 2004 by former Goldman Sachs Group Inc. executives Tom Murphy and Barry Volpert, operates two funds and oversees about $4 billion of assets.

Private-equity firms pool money from investors including pension plans and endowments with a mandate to buy businesses within five to six years, then sell them and return the funds with a profit after about 10 years. Crestview’s financial services investments include stakes of Capital Bank Financial Corp., FBR Capital Markets Corp. and Munder Capital Management, according to its website.

Crestview is preparing to market a new $3 billion fund this year, according to a document prepared by a placement agent and viewed by Bloomberg News. Its predecessor pool, which began investing in 2007 with $2.4 billion, was generating a 16 percent net internal rate of return and a multiple of invested capital of 1.3 at end of June, according to data from the California Public Employees’ Retirement System, an investor in the fund.

Morgan Stanley provided financial advice to KeyCorp, and Sullivan & Cromwell LLP was the legal adviser.

To contact the reporter on this story: Laura Marcinek in New York at

To contact the editor responsible for this story: David Scheer at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.