Voya 2013 Annual Report Download - page 216

We have no right to the benefits from, nor do we bear the risks associated with, these investments beyond
our direct equity and debt investments in and management fees generated from these investment products. Such
direct investments amounted to approximately $654.0 million and $600.0 million as of December 31, 2013 and
2012, respectively. If we were to liquidate, the assets held by consolidated investment entities would not be
available to our general creditors.
Fair Value Measurement
Upon consolidation of CLO entities, we elected to apply the FVO for financial assets and financial liabilities
held by these entities to measure these assets (primarily corporate loans) and liabilities (debt obligations issued
by CLO entities) at fair value. We have elected the FVO to more closely align the accounting with the economics
of the transactions and allow us to more effectively reflect changes in the fair value of CLO assets with a
commensurate change in the fair value of CLO liabilities.
Investments held by consolidated private equity funds and single strategy hedge funds are reported in our
Consolidated Financial Statements. Changes in the fair value of consolidated investment entities are recorded as
a separate line item within Income related to Consolidated Investment Entities in our Consolidated Financial
Statements.
The methodology for measuring the fair value and fair value hierarchy classification of financial assets and
liabilities of consolidated investment entities is consistent with the methodology and fair value hierarchy rules
that we apply to our investment portfolio. See the Fair Value Measurement section of “Item 8. Note 1. Business,
Basis of Presentation and Significant Policies.”
Nonconsolidated VIEs
We also hold variable interest in certain CLO entities that we do not consolidate because we have
determined that we are not the primary beneficiary. With these CLO entities, we serve as the investment manager
and receive investment management fees and contingent performance fees. Generally, we do not hold any
interest in the nonconsolidated CLO entities but if we do, such ownership has been deemed to be insignificant.
We have not provided and are not obligated to provide any financial or other support to these entities.
We manage or hold investments in certain private equity funds and single strategy hedge funds. These funds
are managed as a portfolio of investments that use advanced investment strategies such as leverage, long, short
and derivative positions in both domestic and international markets with the goal of generating high returns. With
these entities, we serve as the investment manager and are entitled to receive investment management fees and
contingent performance fees that are generally expected to be insignificant. We do not hold any equity interest in
these fund VIEs and have not provided and are not obligated to provide any financial or other support to these
funds.
In addition, we do not consolidate funds, in which our involvement takes the form of a limited partner
interest and is restricted to a role of a passive investor, as a limited partner’s interest does not provide us with any
substantive kick-out or participating rights, which would overcome the presumption of control by the general
partner. See “Item 8. Note 19. Consolidated Investment Entities” for more information.
Securitizations
We invest in various tranches of securitization entities, including RMBS, CMBS and ABS. Certain RMBS
investments represent agency pass-through securities and close-to-the-index tranches issued by Fannie Mae,
Freddie Mac, or a similar government sponsored entity. Investments that we hold in non-agency RMBS and
CMBS also include interest-only, principal-only, and inverse floating securities. We are not obligated to provide
any financial or other support to these entities. The RMBS, CMBS and ABS entities are thinly capitalized by
design and considered VIEs. Our involvement with these entities is limited to that of a passive investor. These
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