Painful week for private equity firms invested in Victory Capital Holdings, Inc. (NASDAQ:VCTR) after 8.2% drop, institutions also suffered losses
If you want to know who really controls Victory Capital Holdings, Inc. (NASDAQ:VCTR), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 47% to be precise, is private equity firms. Put another way, the group faces the maximum upside potential (or downside risk).
While institutions who own 30% came under pressure after market cap dropped to US$2.0b last week,private equity firms took the most losses.
Let's delve deeper into each type of owner of Victory Capital Holdings, beginning with the chart below.
View our latest analysis for Victory Capital Holdings
What Does The Institutional Ownership Tell Us About Victory Capital Holdings?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Victory Capital Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Victory Capital Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
Victory Capital Holdings is not owned by hedge funds. Our data shows that Crestview Partners, L.P. is the largest shareholder with 38% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.8% and 3.2% of the stock. David Brown, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Victory Capital Holdings
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Shareholders would probably be interested to learn that insiders own shares in Victory Capital Holdings, Inc.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$188m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Victory Capital Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Equity Ownership
With a stake of 47%, private equity firms could influence the Victory Capital Holdings board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Victory Capital Holdings better, we need to consider many other factors. For example, we've discovered 4 warning signs for Victory Capital Holdings (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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