NEW YORK–(BUSINESS WIRE) – Voya Investment Management (Voya IM), the wealth management business of Voya Financial, Inc. (NYSE: VOYA), announced today that it has tied up $ 4.6 billion in debt for private placement investments in 2020. This included investments of $ 3.5 billion on behalf of institutional clients.
“With more than $ 85 billion spent in the private placement market, we remained disciplined investors and only entered where the credit risk, structure and pricing were within our standards,” said Chris Lyons, head of private credit at Voya IN THE.
Voya IM has seen significant growth in its external customer base over the past five years. Institutional clients now represent 56% of Voya IM’s total US $ 21.5 billion (AUM) of private placement assets under management.
“Other companies in the private placement space do not have the luxury of selectivity because of the huge demand they have to achieve from their general accounts every year. We deliberately limit the size of our total annual investment needs so that we can only focus on transactions that have superior risk / return characteristics. This aligns us with the interests of our clients and is a feature of our platform that has been very popular with institutional investors, ”continued Lyons.
As a result of the market turmoil from COVID-19 in March, the spread premium of private placements over similarly valued corporate public debt rose to its highest level in the past 10 years. This has been an attractive entry point for institutional investors looking to increase their existing allocations or move to the space for the first time. While the team anticipates that private placement spreads will return to median in 2021, they anticipate that spread levels will remain high from the long-term average.
“We work with our clients to help them really understand the space and how an assignment to private placements fits in with the broader context of their portfolio. We believe that the growth of our private placement client base has been driven not only by our performance, but also by our commitment to excellent customer service. Every client is a reference and that’s something we will ensure as our client base grows, “said Virginia O’Kelley of Voya, portfolio manager, personal loans.
Going forward, Voya IM expects infrastructure project financing to continue to constitute a larger part of the overall private lending business. Infrastructure debt was $ 1.4 billion, or 30.4% of the total amount from Voya IM committed and funded in 2020.
Voya IM recently hired a team focused on the creation, underwriting, structuring and management of mezzanine opportunities in renewable energy infrastructure projects. In June 2020, the team closed their first deal, an agreement to provide $ 30 million in debt financing for Bakersfield Renewable Fuels to help retrofit a crude oil refinery to produce diesel from soybean oil and other vegetable feedstocks.
“The addition of our renewable energy project finance team is an excellent addition to Voya’s three decades of diversified infrastructure loans. In order to keep growing, we have to listen to our customers. ESG is becoming increasingly important to customers and we believe that mezzanine debt investments in renewable energy projects are one of the most attractive ways to gain ESG exposure, ”said Lyons.
About Voya Investment Management
Voya Investment Management, a leading active asset management company, has more than $ 245 billion under management for affiliates, third parties and individual investors as of December 31, 2020. Voya Investment Management has over 40 years of wealth management experience and has the experience and resources to provide clients with investment solutions with a focus on stocks, fixed income, and multi-asset strategies and solutions. Voya Investment Management was named “Best Places to Work” by Pensions & Investments Magazine in 2015, 2016, 2017, 2018, 2019 and 2020. More information is available at voyainvestments.com. Follow Voya Investment Management on Twitter @VoyaInvestments.