Voya 2014 Annual Report Download - page 43

benchmark returns or other performance hurdles. In addition, and to a lesser extent, Investment Management
collects administrative fees on outside managed assets that are administered by our mutual fund platform, and
distributed primarily by our Retirement Solutions business. Investment Management also receives fees as the
primary investment manager of our general account, which is managed on an arm’s-length pricing basis.
Investment Management generated operating earnings before income taxes of $210.3 million for the year ended
December 31, 2014.
We are driving Investment Management profitability by leveraging continued strong investment
performance across all asset classes to accelerate growth in AUM (through both greater sales and lower
redemptions) and taking advantage of a rebuilt sales force to increase productivity levels. We are also increasing
scale in our primary capabilities and our share of proprietary funds in affiliate products, principally through
leveraging our access to approximately 46,000 defined contribution plan sponsors and nearly 5 million plan
participants through our Retirement business as of December 31, 2014. We are focused on improving
coordination between our Investment Management and Retirement Solutions businesses to capitalize on
Retirement Solutions’ leading market position and Investment Management’s broad investment capabilities and
strong investment track records. To that end we have established dedicated retirement resources within our
Investment Management intermediary-focused distribution team to work with Retirement Solutions and have
enhanced our Multi-Asset Strategies and Solutions (“MASS”) investment platform (described below) to increase
focus on retirement products such as our target date and target risk portfolios, which we believe will capture an
increased proportion of retirement flows going forward.
We are also growing our third-party affiliated and non-affiliated investment management business through
continued strength of investment performance as well as a number of key strategic initiatives, including:
improved distribution productivity; increased focus on client “solutions” and income and outcome oriented
products such as target date funds; pursuit of investment only mandates on non-affiliate retirement platforms;
replacement of sub-advised Voya Mutual Funds where Investment Management now offers stronger investment
performance; sub-advisory mandates for Investment Management capabilities on others’ platforms; leveraging
partnerships with financial intermediaries and consultants; long -term expansion of our international investment
capabilities; opportunistic launching of capital markets products such as Collateralized loan obligations
(“CLOs”) and Closed End Mutual Funds; and prudent expansion of our private equity business.
Products and Services
Investment Management delivers products and services that are manufactured by traditional and specialty
investment platforms. The traditional platforms are fixed income, equities and MASS. The specialty investment
platforms are senior bank loans and alternatives.
Fixed Income. Investment Management’s fixed income platform manages assets for our general account, as
well as for domestic and international institutional and retail investors. As of December 31, 2014, there were
$116.7 billion in AUM on the fixed income platform, of which $77.6 billion were general account assets.
Through the fixed income platform clients have access to money market funds, investment-grade corporate debt,
government bonds, residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities
(“CMBS”), asset-backed securities (“ABS”), high yield bonds, private and syndicated debt instruments,
commercial mortgages and preferred securities. Each sector within the platform is managed by seasoned
investment professionals supported by significant credit, quantitative and macro research and risk management
capabilities.
Equities. The equities platform is a multi-cap and multi-style research-driven platform comprising both
fundamental and quantitative equity strategies for institutional and retail investors. As of December 31, 2014,
there were $62.1 billion in AUM on the equities platform covering both domestic and international markets
including Real Estate. Our fundamental equity capabilities are bottom-up, research driven and cover growth,
value and core strategies in the large, mid and small cap spaces. Our quantitative equity capabilities are used to
create quantitative and enhanced indexed strategies, support other fundamental equity analysis and create
extension products.
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