Merion Road Capital Re-initiated a Position in Victory Capital (VCTR)

VCTR +1.96% ^SPX +0.17%

Merion Road Capital Management, an investment advisor, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, Merion Road Small Cap Fund returned 5.0% compared to 12.4% return for the Russell 2000 Index. The long-only portfolio of Merion Road returned 10.1% during the quarter compared to the S&P 500’s 8.1% return. The portfolio’s performance was largely driven by the strong performance of Kratos. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Merion Road Capital Management highlighted stocks such as Victory Capital Holdings, Inc. (NASDAQ:VCTR). Victory Capital Holdings, Inc. (NASDAQ:VCTR) is an asset management company. The one-month return of Victory Capital Holdings, Inc. (NASDAQ:VCTR) was -2.89%, and its shares lost 9.70% of their value over the last 52 weeks. On November 20, 2025, Victory Capital Holdings, Inc. (NASDAQ:VCTR) stock closed at $61.73 per share, with a market capitalization of $4.123 billion.

Merion Road Capital Management stated the following regarding Victory Capital Holdings, Inc. (NASDAQ:VCTR) in its third quarter 2025 investor letter:

"During the quarter I re-established a position in Victory Capital Holdings, Inc. (NASDAQ:VCTR). VCTR has closed their acquisition of the Amundi US business and now boasts over $300bn in assets under management. Net flows for the acquired business were positive in 2024 and for 2025 YTD. On a consolidated basis, there is upside to flows should VCTR be able to realize the immense cross-selling opportunity at hand. As a reminder Amundi globally manages over $2 trillion in assets, has a 15-year distribution agreement with VCTR, and economic exposure to VCTR with ownership of 23mm equivalent shares (worth about $1.5bn). Management increased their cost synergy target to $110mm and have historically exceeded their guidance. I believe that the company can achieve at least $7.00 / share next year in free cash flow, putting them at about 9x. This level is at a discount to comparable asset managers and does not give the company credit for operational upside and strong capital allocation."

Victory Capital Holdings, Inc. (NASDAQ:VCTR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Victory Capital Holdings, Inc. (NASDAQ:VCTR) at the end of the second quarter, which was 16 in the previous quarter. Victory Capital Holdings, Inc.’s (NASDAQ:VCTR) third quarter revenue increased 3% from second quarter to $361.2 million. While we acknowledge the potential of Victory Capital Holdings, Inc. (NASDAQ:VCTR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Victory Capital Holdings, Inc. (NASDAQ:VCTR) and shared TimesSquare Capital U.S. Focus Growth Strategy's views on the cpmpany. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.