This AM Makes 20 Percent of Its Parent's Profits
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Monday, November 11, 2019

This AM Makes 20 Percent of Its Parent's Profits

A $267-billion-AUMA asset manager now accounts for a fifth of its parent's profits.

Christine Hurtsellers
Voya Financial
CEO, Investment Management
Rod Martin, chairman and CEO of Voya Financial (parent of Voya Investment Management), states on the New York City-based firm's Q3 2019 earnings call (as transcribed by Seeking Alpha) that, "In Investment Management, we generated $1.3 billion of net flows in the quarter, including positive institutional and retail flows. We also saw improvement in our operating margin."

Christine Hurtsellers, CEO of Investment Management, says "we do have strong performance fees ... So, the way to think about it in the fourth quarter, very strong performance here for our clients. This particular strategy, the returns of performance are tied more to U.S. securitized markets. Not to equities. So, we're confident that we're going to be earning these fees as we put forward, even if the market gets a little bit more volatile from here." She also emphasizes organic growth.

In Voya's Q3 2019 quarterly investment supplement, the team reports that Voya IM's operating earnings for Q3 2019 were $46 million, which is up 12 percent from $41 million in Q2 2019, and down 4.2 percent from $48 million in Q3 2018. (Total adjusted operating earnings for Voya were $226 million in Q3 2019, $235 million in Q2 2019, and $265 million in Q3 2018; thus, in each those quarters Voya IM accounted for 20.4 percent, 17.4 percent, and 18.11 percent of Voya Financial's total adjusted operating earnings, respectively.) Total AUA + AUM for Investment Management equalled $267 billion at the end of Q3 2019. This is up 1.1 percent from $264 billion in Q2 2019, and up 3 percent from $259 billion in Q3 2018. According to the Third Quarter Investor Presentation, Investment Management saw Q3 2019 organic growth at 1 percent, Q2 2019 saw organic growth at 0.9 percent, and Q3 2018 saw organic growth at 1.1 percent.

Overall, Voya Financial misses analysts' EPS expectations by $0.04 with a Q3 Non-GAAP EPS of $1.36 and by $0.47 with a Q3 GAAP EPS of $0.81.

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