So, ING US
is rebranding itself, and will, at some point this year, chart its own course via an IPO.
Will this new ship have a Bon Voya … or will it be the cruise from hell?
More to the point for fundsters, what impact could Voya have in the asset management arena?
It's of course far too early to answer definitively right now. The IPO, which was just amended to include an estimated price in the $600-million range
, is slated for some point this year, but we don't know when. And the rebranding itself is expected to take 24-months to complete after that.
This gives us enough time to watch the process and ask a few choice questions.
How Will Voya Use its Newfound Freedom?
It can't be overstressed, investment executives like their freedom. Just ask the folks at Victory
, who bought their freedom in February
, or at Altegris
did the same earlier this month
An IPO would allow U.S.-based executives to make decisions related to needs sprouting from the markets in which they operate, namely, the U.S., instead of addressing the needs of their cash-strapped Dutch masters, who are still repaying Netherlands government bailout debts by selling everything that isn't nailed down.
How will Voya use its freedom with regards to product development and PM hires (and fires)? How aggressively will it fight for a place in all the crowded mutual fund channels? What value proposition will it articulate to U.S. investors now that it can focus on this market?
Will Voya Embrace Mutual Funds?
It sounds like an odd question, given the fact that we're talking about a $183-billion asset manager that markets over 50 mutual funds of all sizes, shapes and flavors.
Consider the history of the company soon-to-be-known-as-Voya, beautifully presented on this company website
ING's Dutch predecessor first set up shop in the U.S. in 1975, as a life insurance business
, and over the years grew, in part, by buying predominantly other insurers, like Security Life of Denver
, Life of Georgia
, Equitable of Iowa
and, of course, Aetna Financial Services
Insurers have notoriously complex relationships with asset management. They need to be good investors because that's primarily how they profit from the deposits of their policyholders. Some feel confident enough to sell this expertise in side businesses like mutual funds, etc., but at the end of the day, it's not a core focus.
Take a gander at the current senior leadership at ING U.S.
, and you'll notice important names like Jeffrey Becker
, chief executive officer, Shaun Mathews
, head of client group, which includes the mutual fund business, and Mark Spina
, managing director of and head of intermediary distribution.
The fact that mutual funds are clustered among other products within a "client group," and not given its own C-level executive to manage, is perhaps a sign that funds are treated more like an additional product line, rather than its own business.
Semantics? Perhaps, but mutual funds are a ferociously competitive business. Will Voya be a firm that obsesses constantly about mutual funds, like virtually everyone else in this space, or will it be an insurer that dabbles in '40 Act products?
Does Voya's Leadership Have What it Takes?
The three names noted above have all been with ING/Voya for at least a dozen years. That's a lot of time devoted to navigating the politics of working with a foreign master. Can that skill-set translate into the skill-sets of charting one's own course and fighting whatever sea battles necessary to thrive in this perilous market?
There is another question related to ING/Voya's management. Over the years, there has been some instability in the upper ranks. For example, one high-level sales hireleft the company after only six weeks
Can Voya tighten and tame the upper ranks? Only time will tell.
It's important to note that at least one mutual fund expert has sanguine expectations for Voya.
Neil Bathon, founder and partner at FUSE Research Network, told MFWire
that he is optimistic about the Voya developments.
For example, Bathon thought the name itself was a good touch.
I think it is better for a firm to have a name that doesn't already mean something inherently. People will connect it to voyage. Some connection to the voyage that investors will be on.
It doesn't have any intrinsic meaning. They get to fill it in with however they want. During the course of the branding effort, they will decide whatever meaning it will have in the marketplace.
Further, Bathon declared that "I do think well of the management. I do think they have a nice sales force. Good management and sales marketing infrastructure. Management has filled some holes and addressed some problem areas. The performance on the product line is rebounding."
Finally, Bathon voiced approval for the timing of the deal.
"The marketplace gets thrown off by disruption. This has been known to be coming for a while. This is a pretty good time for all of this to be happening," he said.
He added that "it's a good thing to not have this having over your head. The market place has been waiting a long time for this to happen. It's not disruptive, but it certainly isn't helpful. It's nice to finally get this past."
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