Fourth quarter results, marked by $5.4 billion in outflows — all institutional — were "weaker-than-anticipated as broader industry headwinds continued," noted Voya Financial CEO Heather Lavallee, on an earnings call.
But Lavallee pointed to strong investment returns for the bulk of Voya Investment Management's strategies over the past year and a "robust unfunded pipeline of over $10 billion for 2024," as factors that should bolster the firm's results as macro conditions normalize and cash moves off the sidelines over the coming year.
The latest year's mix of institution outflows and retail inflows marked a break with the previous five years, which saw consistent net inflows from institutional clients more than offsetting net outflows from retail investors.
Executives tied those healthy retail flows in 2023 to the expanded distribution footprint Voya forged with Allianz Global Investors in mid-2022 when the two companies agreed to a strategic partnership.
Under the deal, Voya acquired AGI's U.S. asset management business while AGI agreed to distribute Voya Investment Management investment strategies outside the U.S. and Canada. AGI, meanwhile, acquired a 24% stake in Voya Investment Management, leaving Voya Financial with 76%.
"We've transformed our investment management business into a diversified international asset manager with a broad array of investment strategies across institutional and retail markets," said Ms. Lavallee.
Matt Toms, the recently appointed CEO of Voya Investment Management, speaking on the same earnings call, predicted growing dividends from the AGI deal for Voya Investment Management's business in 2024 and beyond.
"We're extremely excited about the partnership that we have globally with AGI," which helped Voya Investment Management pull in just under $4 billion of net retail inflows from overseas for the year just ended, Toms said, calling the deal "a game-changer for us."