TOMS Capital Presses Voya Financial to Consider Sale Amid Governance Concerns
Investment manager argues core retirement and asset management units are undervalued, urging insurer to act urgently as market consolidates.
TOMS Capital Investment Management, a significant shareholder in Voya Financial, has formally urged the insurer’s board to initiate an urgent assessment of strategic options, including a potential sale of the company. In a letter addressed to the board, the investor criticised directors for a “failure to oversee management” and for failing to address persistent underperformance, stating that the current leadership team can no longer be trusted to navigate the firm through its current inflection point.
The shareholder identified the $570 million acquisition of Benefitfocus as a central factor in Voya’s depressed valuation. TOMS argued that the deal, completed at the start of CEO Heather Lavallee’s tenure, was financially dilutive and poorly aligned with the company’s core interests. Despite shareholder support for share repurchases at the time, the board backed a 49% premium for the asset, a move TOMS contends has weighed on the stock price.
TOMS highlighted that Voya’s core retirement and investment management businesses, which account for approximately 89% of 2025 adjusted operating earnings excluding corporate items, remain robust. These units have continued to attract net assets while competitors have recorded declines, positioning Voya as a top five defined contribution recordkeeper. The firm now manages nearly 10 million accounts across 45,000 employers and holds more than $1 trillion in client assets under administration.
Performance metrics cited in the letter further underscore the strength of these core operations. TOMS noted that Voya’s investment management arm has exceeded peers or benchmarks on 78% of assets over a three-year period and 82% over a ten-year horizon. The investor argued that the market is failing to recognise the value of these high-performing units due to the drag from the Benefitfocus acquisition and broader governance issues.
The letter also pointed to inconsistencies in management’s public stance on the stop-loss business. TOMS cited comments from sell-side analysts indicating that while management publicly defended the unit as a critical “earnings grower,” they had privately raised the prospect of divesting it in later meetings. This discrepancy, combined with the fact that other sector peers have taken write-downs on comparable assets, has heightened concerns about the board’s strategic direction.
Amid a rapidly consolidating insurance and asset management market facing rising fee pressure, TOMS called for clearer decision-making and urgent action. The investor concluded that both management and the board had fallen short in protecting shareholder value, necessitating a formal review of options to unlock the company’s true potential.
