Refinitiv reported, “The U.S. leveraged loan market is back at full steam after a tumultuous year, with demand outweighing supply and investors eager to put their cash to work.” According to Refinitiv, “Several issuers have since taken this opportunity to re-launch transactions that were pulled last year, including retailer PetSmart, business information provider ION Analytics and marketing solutions provider Thryv.” Voya Investment Management Group Head and Chief Investment Officer of Senior Loans Jeff Bakalar said, “‘The market is wide open and more receptive than it was four to five months ago,’ ... pointing to the technical recovery that has taken place in the loan market over the last few weeks.” He also said that “issuers that were caught up with the coronavirus-driven market sentiment and could not capture a good deal, especially in the second half of 2020, are likely to return to the market.”
Bloomberg reported, “Collateralized loan obligation managers are expected to extend a run of frenzied sales this month” as “no less than seven new-issue CLOs are currently marketing” as well as “two refinancings and at least four so-called resets.” January’s new-issue volume of “nearly $9 billion” was “the highest for the month” as far back as “2013 when $8 billion was issued.” Bloomberg added, “Voya Investment Management sees good relative-value opportunity in CMBS conduits,” said Dave Goodson, head of securitized credit at Voya. According to Goodson, “Commercial real estate CLOs also represent a good opportunity and have a place in Voya’s portfolio,” but he also said that “Voya is bearish on CMBS deals with call options” though they “are a small but meaningful part of the CMBS universe.” Goodson said, “We are the most bullish right now on CMBS.”
In a piece for TheStreet’s “Retirement Daily,” Voya Financial Senior Portfolio Manager and Asset Allocation Head Barbara Reinhard writes, “We see the U.S. economy shifting into a ‘K-shaped’ recovery defined by uneven pressures that will create winners and losers with broad strokes across asset classes, sectors, and investment styles.” According to Reinhard, the Federal Open Market Committee’s adjusted longer-run inflation target, which now seeks “to achieve inflation that averages 2% over time,” along with “the Fed’s adjusted stance on ... unemployment could have longer-term implications for the ‘growth versus value’ debate in equities.” Reinhard contends that “history has shown that we need both real rates to be off their lows and inflation to be expected to pick up for value to deliver outperformance” and that “equity investors can add some value exposure to their portfolio for diversification, in case the Fed is successful and the long-standing leadership of growth stocks comes to an end.” In addition, Reinhard says “there are still opportunities to prepare portfolios today for the low-yield world ahead,” despite the dramatic stock market recovery that started in April.
Appearing on Bloomberg Markets: The Close, Matt Toms of Voya Investment Management said, “We see risk premium on. You’ve seen a rally in corporate bonds and high-yield bonds, and EM debt of all flavors...where you’re not seeing the really big unhinging as in the yield curve, where you’re going to struggle to get above 1% in the near term.” On Brexit, Toms said Voya has long believed that a no-deal Brexit would be “mutually-assured destruction,” that it was always “going to get done,” and that it looks like “we are finally there.” On bonds and the dollar drop, Toms said there is more spread compression to come, and spreads likely will be “uncomfortably low” over the next 18 months. Toms said emerging markets have high potential for growth, and “EM’s growth rate will attract capital” as a “softer U.S. dollar will push capital.”
Pensions & Investments recently released its ranking of the Best Places to Work 2020. Voya Investment Management was ranked #3 and continues a five-year run in the ranking. The company offers “a 401(k) match of up to 6% and a 4% defined benefit plan,” while employees “are encouraged to volunteer and are paid up to 40 hours a year for volunteer time away. The company’s foundation matches donations to non-profits up to $5,000 annually.” When asked about the environment, Voya Investment Management employees said, “Leadership has been amazing during the COVID-19 pandemic, from making sure people can work remotely and being supportive of flexible schedules to encouraging healthy activities.” Another employee said, “The culture is great and the people are collegial. The organization’s values were on display during the Black Lives Matter protests and it created a sense of community.”
Under the headline, “Biden victory points to new securitization backdrop,” GlobalCapital reported that the U.S. “mortgage market is anticipating big changes” under President-elect Joe Biden, with Federal Housing Finance Agency (FHFA) Director Mark Calabria “at risk of dismissal.” The U.S. Supreme Court is currently reviewing a case about the FHFA’s leadership and some “sources predict that Calabria’s dismissal would come sometime in the first term of Biden’s presidency, and as soon as the first half of 2021.” Voya Investment Management Head of Securitized Dave Goodson said, “We will probably feel the impact most poignantly and more immediately on the residential mortgage side of the securitized universe.” Goodson added, “We’ve already seen some forces put into motion.”
During a Bloomberg TV appearance, Voya Financial Senior Portfolio Manager and Asset Allocation Head Barbara Reinhard discussed the market news of the day, including the Russell 2000 closing at a record high. On that news, Reinhard commented that “small caps have been beating value” in “the past one- and three-month period which does tell us small caps have leveraged the cyclical upswing. ... It is not surprising to see them do so well and we are very happy with that development in the market.” Reinhard also commented on President-elect Biden’s expected nomination of former Federal Reserve Chair Janet Yellen as U.S. Treasury Secretary, saying, “I think Janet Yellen being appointed to the U.S. Treasury is a very powerful move on behalf of the incoming Biden Administration. ... I think she is well-versed on some of the difficulties that we’re seeing at the Fed in so many instances during her tenure. I think she also is well grounded in what she knows and doesn’t know. I think that she will certainly rely on some of the people at the Treasury and professionals at the Treasury.” Later during the interview, when asked about the high-yield bond market, Reinhard said, “There is still a very big reach for yield going on. You cannot find much yield in the Treasury market.” She added, “The corporate market certainly looks like it has given a lot of value at this point. So, I think it’s natural for pieces of high yield to start really participating that haven’t been able to participate previously. Don’t forget: the supports that the Fed had put in place to the high yield market were really significant.”
Bloomberg TV interviewed Voya Investment Management CEO Christine Hurtsellers. During the interview, Hurtsellers said that “we are worried” about the Washington’s inability to pass a fiscal stimulus package. According to Hurtsellers, “Our core view is we need $1.5 trillion ... to get things underway.” She added that further delay will fuel the need for a larger package in the future, which may need to total $2.5 trillion to properly shore up the economy. In particular, Hurtsellers said that “the lower income bracket, the people getting affected by COVID, they need the help to continue to boost consumer confidence.” As for potential investment opportunities, Hurtsellers said that “for our sophisticated client, we think commercial real estate” presents a compelling choice, especially for investors “a little more on the risk spectrum.”
In continuing coverage, PlanAdviser reported, “Voya Investment Management announced that it has acquired the technology and hired the founding team of G Squared Capital LLP (G2), a London-based investment manager that serves institutions and other sophisticated investors.” According to PlanAdviser, “G2’s technology applies machine intelligence to fundamental investing. The company’s proprietary technology is built to identify persistent patterns in company data.” Under the deal, “G2 Principals Gareth Shepherd, Gabriel Andraos and Yana Kramer will form the new Equity Machine Intelligence (EMI) group within Voya Investment Management’s quantitative equities business.” PlanAdviser added, “Based in London, they will report to Vincent Costa, head of quantitative equity for Voya Investment Management.” Voya IM Head of Equities Michael Pytosh said, “This transaction supports our focus on building best-in-class equity portfolios that meet our clients’ long-term investment needs. Further, our new EMI team has the knowledge base and tools to accelerate Voya’s efforts to incorporate environmental, social and governance [ESG] factors in our investment selection process.”
Private Banker International, “Voya Investment Management (IM) has acquired the technology of G Squared Capital (G2) to boost its equity investment business.” Neither party disclosed the financial details of the transaction. “Founded in 2011, G2 is based in London and focuses on delivering customised investment solutions.” G2 “uses artificial intelligence to find persistent patterns in company and ESG data.” According to Voya IM Equities Head Michael Pytosh, “This transaction supports our focus on building best-in-class equity portfolios that meet our clients’ long-term investment needs.” He added, “Further, our new EMI team has the knowledge base and tools to accelerate Voya’s efforts to incorporate environmental, social and governance (ESG) factors in our investment selection process.”
