Activist investor Toms Capital Investment Management has called on Voya Financial to evaluate a range of strategic options, including a potential sale of the company, arguing that the insurer and asset manager continues to trade below the valuation levels of comparable firms, according to a report by Reuters.
In a letter sent to Voya’s board, the hedge fund – one of the company’s largest shareholders – said the firm’s share price discount reflects what it described as inconsistent strategic execution and a loss of confidence in management among investors.
Toms Capital acknowledged Voya’s operational strengths, highlighting continued growth in its retirement and investment management franchises, as well as asset-gathering performance that it said compares favourably with industry peers. However, it argued that these strengths have not been fully reflected in the company’s market valuation.
Voya, which manages and administers approximately $1.1tn in client assets, has seen its shares gain around 9% since the start of the year. While positive, that performance trails several peers in the financial services sector, including Principal Financial Group and Franklin Resources, both of which have posted stronger gains over the same period.
According to Toms Capital, the gap between Voya’s operational performance and its market valuation warrants a review of alternatives that could unlock shareholder value. The activist investor suggested that a number of asset management firms have publicly expressed interest in acquisitions and have outlined strategic criteria that closely align with Voya’s business profile.
The letter stops short of identifying specific potential acquirers but argues that industry consolidation trends and buyer interest create a favourable backdrop for exploring a transaction.
