Hedge fund Toms Capital Investment Management plans to file proxy materials Thursday seeking a vote of no confidence in Voya Financial's management and board, according to a letter seen by The Wall Street Journal. TCIM, which holds roughly a 4.5 percent stake in the asset manager, wants Voya to run a strategic review and explore a potential sale.
Toms Capital, with a 4.5 percent stake, plans to file proxy materials Thursday seeking a no-confidence vote in Voya's board and management.
Voya CEO Heather Lavallee, responding to an analyst's question about TCIM on Wednesday's earnings call, said the firm doesn't comment on "rumors or headlines nor do we allow ourselves to get distracted by it."
TCIM holds roughly a 4.5 percent stake in Voya, making it one of the company's largest shareholders. Voya has a market value of about $9 billion, and its shares have climbed more than 30 percent over the past 12 months, driven in part by takeover speculation. TCIM, which manages about $3.8 billion in assets, first publicized its position in June during a wave of consolidation in the asset-management industry.
TCIM wants Voya to commit to a strategic review and abandon efforts to turn around its stop-loss insurance business, which the fund argues is dragging down the company's valuation. Potential buyers for Voya or its stop-loss unit include Empower, part of Great-West Lifeco; Principal Financial; and Sun Life, according to a Raymond James note.
TCIM has been privately pushing Voya for months to evaluate strategic alternatives, including an outright sale, to no avail, the letter said. The hedge fund argued that Voya has underperformed and that the board has failed to hold management accountable or move quickly enough to address shareholder concerns.
Voya's most recent annual meeting was held in May. TCIM plans to file proxy materials Thursday, which would precede a meeting to count the vote. Voya declined to comment.
TCIM said that while Voya's retirement and investment-management businesses are strong franchises, the company trades at a discount to peers largely because it hasn't given up on its stop-loss business, which shields self-insured employers from costly employee health claims.
Lavallee added: "At the end of the day, the board and management, we're always going to do what is in the best long-term interest of shareholders. That includes restoring the stop-loss business to the target margins that we have talked about."
TCIM, co-founded by Ben Pass, rarely engages in public activist fights and is known for working behind the scenes. The fund has built positions at Target, Kellanova (now owned by Mars), CSX, and Kenvue.
The escalation raises the stakes for Voya's board ahead of any proxy vote, and the stock's 30 percent rally over the past year suggests investors are already pricing in a potential transaction. The next event to watch is TCIM's proxy filing Thursday, which will detail the fund's case against management and set the timeline for a shareholder vote.
This article is for informational purposes only and does not constitute investment advice.
