Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

Risk Reward – Victory Capital Holdings Inc (VCTR.O)

KEY EARNINGS INPUTS

Drivers Dec 2025 Dec 2026e Dec 2027e Dec 2028e

LT Net Flows (%) (2.5) 2.0 1.4 2.0

LT Market Appreciation (%) 21.9 10.6 4.4 4.4

EOP AUM ($, bn) 313.8 352.6 373.0 396.7

Mgmt Fee Rate (%) 0.389 0.383 0.370 0.366

Operating Margin (%) 50.1 51.5 50.5 50.8

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

Industry consolidation presents meaningful RISKS TO UPSIDE FY Dec 2027e

growth opportunities for VCTR given their Potential M&A that enhances growth & 8.13 unique platform that's well placed to acquire earnings profile EPS

and execute on transactions. Recent M&A contributes better than expected ($) 7.87 8.37

Expanding platform capabilities & broadening flows and EPS 8.16

distribution reach supports organic growth. Better than expected flow trajectory with

products gaining momentum 652

Net income

GLOBAL REVENUE EXPOSURE RISKS TO DOWNSIDE ($, mm) 616 678

Poor investment performance, capacity

constraints on top funds, and newer strategies

100% North America fail to gain traction that see worse flow 859 EBITDA

outlook 852 904 ($, mm)

Market drawdown pressures AUM-based fees 876

Re-investment needs to grow weigh on margins

Source: Morgan Stanley Research Estimate

View explanation of regional hierarchies here Mean Morgan Stanley Estimates

OWNERSHIP POSITIONING Source: Refinitiv, Morgan Stanley Research

MS ALPHA MODELS Inst. Owners, % Active 58.7%

HF Sector Long/Short Ratio 1.4x

3/5 24 Month 5/5 3 Month

BEST Horizon MOST Horizon HF Sector Net Exposure 7.5%

Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is Refinitiv; MSPB Content. Includes certain hedge fund

the highest favored Quintile and 5 is the least favored exposures held with MSPB. Information may be