KeyCorp announced Thursday that it will sell its investment management arm, Victory Capital Management and its broker dealer affiliate, Victory Capital Advisers, to a group led by Victory’s senior management.

The Cleveland-based banking company said it plans to seek regulatory approval to use the gain from the sale to repurchase shares of its common stock.

"For Key, the divestiture is consistent with our strategic focus on businesses that leverage the competitive advantages of our core relationship banking model," said Beth E. Mooney, the bank’s chairman and CEO, in a press release.

Under a new ownership structure, two of Victory's top executives, David Brown and Christopher Ohmacht, will continue to lead Victory and will be appointed to the company’s new board of directors along with two representatives from Crestview Partners, a New York private equity firm, and three independent directors. When the acquisition closes in the third quarter, Brown will become chief executive officer, and Ohmacht president of Victory.

The group will pay $246 million in cash and debt for the businesses.

“This new ownership structure will preserve our successful multi-boutique operating model and provide an opportunity for real equity ownership to our employees that will align our interests with those of our clients, today and well into the future,” Brown said in a statement. “From the day-to-day perspective of our clients and investment professionals, nothing significant will change. Strategically, we will have an ownership structure that provides our firm with the ability to drive future growth and to continue delivering leading investment performance and high quality service to our clients.”

Victory, which is based in Cleveland and has offices in New York, Cincinnati, Denver and Tampa, Fla., managed and advised approximately $22.1 billion in equity and fixed income assets on behalf of institutional and individual investors as of Dec. 31.

Victory manages 19 mutual funds, the Victory Funds, and also offers retail and retirement clients separately managed accounts through wrap fee programs and access to its investment models through unified managed accounts.

Victory had $7.4 billion in retail assets under management and advisement as of Dec. 31.