TOMS Capital Investment Management has conveyed its deep dissatisfaction to Voya Financial's board, expressing severe criticism regarding the directors' perceived failure in overseeing management and addressing the company's consistent underperformance. As one of Voya's largest stakeholders, TOMS Capital has explicitly urged the board to initiate a formal review of all strategic alternatives, including a potential divestiture of the company, emphasizing the immediate need for decisive action to rectify the current situation.
A primary point of contention for TOMS Capital is the Benefitfocus acquisition, which it believes has significantly contributed to Voya's diminished valuation. Despite this, TOMS Capital acknowledges the robust performance of Voya's core segments – retirement and investment management – which collectively account for approximately 89% of its projected 2025 adjusted operating earnings. These divisions have notably continued to attract net assets, a feat achieved while many competitors have experienced declines, positioning Voya as a leading defined contribution recordkeeper with a vast client base and over $1 trillion in managed assets. Furthermore, Voya's investment management arm has consistently outperformed its peers and benchmarks over both three-year and ten-year periods, underscoring the intrinsic value within these operations.
TOMS Capital also raised concerns about the management's transparency and decision-making post-acquisition, particularly regarding the Benefitfocus deal, for which Voya paid a substantial 49% premium despite its financially dilutive nature and poor strategic alignment. The investor pointed to the lack of detailed updates on Benefitfocus following its purchase and noted that other companies in the sector have reported write-downs on similar assets. Additionally, TOMS Capital highlighted management's shifting stance on the stop-loss business, initially defending it as a key earnings driver before privately considering its divestment. This perceived inconsistency, coupled with a rapidly consolidating market facing increasing fee pressures, has led TOMS Capital to conclude that both Voya's management and board have failed to demonstrate the clear leadership necessary for navigating the company's future effectively.
In light of these pressing concerns, it is imperative for Voya Financial to engage in a comprehensive reevaluation of its strategic direction. This proactive step would not only address shareholder anxieties but also serve as a vital opportunity to reinforce corporate governance, foster transparency, and renew focus on value creation. By embracing a forward-looking approach, Voya can re-establish trust, revitalize its market position, and ensure sustainable growth for all stakeholders, ultimately safeguarding its legacy as a responsible and dynamic financial institution.
