Toms Capital pushes Voya shareholders for strategic review

Toms Capital Investment Management will file proxy materials asking Voya shareholders to hold a vote of no confidence in the company’s management and board and to force a strategic review that could include a sale. The hedge fund owns about 4.5% of Voya and manages roughly $3.8 billion. The filing follows several months of private talks that did not lead to a formal review.

TCIM first disclosed its stake and launched a public campaign in June, urging Voya’s board to open a formal strategic review. Voya has a market value of about $9 billion. Its shares have risen more than 30% over the past year as consolidation in the asset-management industry has increased takeover speculation.

Toms Capital points to Voya’s stop-loss insurance business as the main factor weighing on the company’s valuation. Stop-loss insurance protects self-insured employers from unusually large employee-healthcare claims. The activist wants Voya to stop trying to turn around the stop-loss operation and to pursue strategic alternatives for that unit or consider selling the company.

Analysts have identified potential buyers for Voya or its stop-loss arm, including Empower, Principal Financial and Sun Life.

On the company’s recent earnings call, Chief Executive Heather Lavallee told investors management will continue to focus on the long-term interests of shareholders and on improving the stop-loss business’s performance.

TCIM’s campaign is the firm’s first formal public statement on an investment; it has generally preferred private engagement in the past. The firm was co-founded by Ben Pass and has held positions in companies such as Target, Kellanova, CSX and Kenvue.

If shareholders back the hedge fund in a vote of no confidence, Voya’s board may launch a formal strategic review or enter discussions about selling assets or the company. If shareholders do not back the effort, the vote will serve as a measure of investor support for the current strategy and management.

The planned proxy contest is expected to be closely watched by potential buyers and industry observers after a year of increased merger interest in asset managers.