Voya 2013 Annual Report Download - page 369

ING U.S., Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
individual assets and liabilities in the fund portfolio. Rather, the Company would be required to redeem or
dispose of its entire interest in the investee fund. There is no current active market for interests in underlying
private equity funds.
Valuation is generally based on the valuations provided by the fund’s general partner or investment manager. The
valuations typically reflect the fair value of the Company’s capital account balance of each fund investment,
including unrealized capital gains (losses), as reported in the financial statements of the respective investee fund
as of the respective year end or the latest available date. In circumstances where fair values are not provided, the
Company seeks to determine the fair value of fund investments based upon other information provided by the
fund’s general partner or investment manager or from other sources. Private equity fund investments are
classified within Level 3 of the fair value hierarchy.
The fair value of securities received in-kind from fund investments is determined based on the restrictions around
the securities.
• Unrestricted, publicly traded securities are valued at the closing public market price on the reporting
date;
• Restricted, publicly traded securities may be valued at a discount from the closing public market price
on the reporting date, depending on the circumstances; and
• Privately held securities are valued by the directors/general partner of the investee fund, based on a
variety of factors, including the price of recent transactions in the company’s securities and the
company’s earnings, revenue and book value.
As of December 31, 2013, certain private equity funds maintained revolving lines of credit of $400.0, which
renew annually and bear interest at LIBOR/EURIBOR plus 235-250 bps. As of December 31, 2012, a private
equity fund maintained a revolving line of credit of $325.3, which renews annually and bears interest at LIBOR/
EURIBOR plus 250 bps. The lines of credit are used for funding transactions before capital is called from
investors, as well as for the financing of certain purchases. The private equity funds generally may borrow an
amount that does not exceed the lesser of a certain percentage of the funds’ undrawn commitments or a certain
percentage of the funds’ undrawn commitments plus 350% asset coverage from the invested assets of the funds.
As of December 31, 2013 and 2012, outstanding borrowings amount to $212.2 and $288.4, respectively. The
borrowings are reflected in Liabilities related to consolidated investment entities—other liabilities on the
Consolidated Balance Sheets. The borrowings are carried at an amount equal to the unpaid principal balance.
As of December 31, 2013, a certain single strategy hedge fund sold securities under an agreement to repurchase
at a specified future date. Securities sold under an agreement to repurchase are not derecognized on the
Consolidated Balance Sheets as the single strategy hedge fund retains substantially all the risks and rewards of
ownership. The obligation to repay the corresponding cash received is recognized in the Consolidated Balance
Sheets in Liabilities related to consolidated investment entities—other liabilities. As of December 31, 2013,
outstanding financings amount to $147.5.
Private Equity Companies
In the case of direct investments or co-investments in private equity companies, the Company initially recognizes
investments at cost and subsequently adjusts investments to fair value. On a quarterly basis, the Company
reviews the general partner or lead investor’s valuation of the investee company, taking into account other
available information, such as indications of a market value through subsequent issues of capital or transactions
between third-parties, performance of the investee company during the period and public, comparable
companies’ analysis, where appropriate.
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