News

Voya senior portfolio manager and head of asset allocation Barbara Reinhard was on Bloomberg TV discussing her outlook for the stock market and the broader macro environment. Reinhard said that she believes “bond yields have probably already peaked at this point. We saw the top of the 10-year Treasury yield peak back in very early May and we think that the world is going to go from worrying about inflation to worrying about recession. So, we think this is the very beginning of the worries we see happening for the economy.”

Bloomberg reports that the number of conflicts between creditors is increasing as distressed debt investing grows more common. In the most recent example, a KKR-backed company “secured a $1 billion financial lifeline by shifting its most valuable assets to a new loan, tanking the value of its older debt in the process.” According to Bloomberg, the move “signals that even with supply-chain disruptions, rising inflation and monetary-policy tightening fueling a fresh wave of opportunities, firms in the cutthroat business of distressed-debt investing aren’t scaling back efforts to cash in at their rivals’ expense.” Voya Investment Management chief investment officer of fixed-income Matt Toms said, “I don’t think growth in distressed-debt supply will decrease tension – I think it’s only going to increase it. In a rising interest-rate environment, not only does the cost of debt go up, the patience of capital goes down.”

Bloomberg reports that money managers are “being seduced by a relatively rare type of security – so-called recovery bonds – for their attractive spreads, duration and safety.” The bonds are generally issued by utility companies “trying to recapture losses from natural disasters, such as wildfires or storms, through special fees levied on customers’ electric bills. The charges are then bundled up and sold as notes which get classed as asset-backed securities.” Voya Investment Management head of securitized credit David Goodson believes the AAA rated notes make an attractive opportunity for investors who do not usually deal with structured products, saying, “Corporate investors throw in big orders, splashing the pot. That duration and spread at the AAA level makes these bonds look attractive relative value-wise.”

AiThority reports Voya Financial has named Tatyana Kibrik the new Chief Technology Officer of Voya Investment Management. In her new role, Kibrik “will be responsible for providing strategic technical leadership to innovate and implement solutions that enhance Voya’s investment and distribution efforts” by focusing “on investment and trading technologies, while advancing the firm’s investments in robust data science, machine learning, automation and environmental, social, governance capabilities for the benefit of Voya’s clients.” Voya Chief Information Officer Santhosh Keshayan said, “Tatyana brings to the role vast technical knowledge and deep leadership experience to help Voya continue our evolution to become a technology-enabled company and advance our investment and trading technologies in alignment with our business growth plans. Her broad experience will be instrumental as we continue to advance our business strategy to create better outcomes for our stakeholders.”

MarketWatch reports that even though most analysts believe “high-quality bonds should hold up better than stocks” in an inflationary environment, “that hasn’t been the case lately for debt issued by many Fortune 500 companies.” The sector has registered a -10% total return so far this year, one of its worst since the financial crisis, though sentiment may be changing. Voya Investment Management head of investment-grade credit Travis King said, “I think individual investors are still licking their wounds, given the negative total returns. But we think with around 4% yields it starts to look like a better entry point, particularly if there is stability in the Treasury market.”

Bloomberg reports that fund managers “are cranking up the production line for sustainability-linked ETFs as investor demand defies this year’s rates and Russia-driven market turmoil.” Twenty new ESG-focused ETFs have launched in the US so far this year, “roughly double a tally of nine from the same period in 2021, and compares with two in 2020 and just one in 2019.” Voya Investment Management head of ESG research believes the war in Ukraine has “brought new focus to various social and sustainability issues,” with clean energy funds benefitting “from the push to reduce fuel dependence on Russia.”

CEO Magazine (AUS) reports on how companies are leading “the energy transformation that’s currently taking place by investing in green energy initiatives” as they work to transition to a low-carbon world. Voya Investment Management “has put aside $300 million for renewable energy projects,” with more than half devoted to “supporting wind and solar power initiatives, while the remaining half will be directed toward sustainable infrastructure such as battery storage.” Voya Investment Management Co-Head of Direct Infrastructure Edward Levin said of the company’s approach, “We are thrilled to bring our expertise in renewable energy project financing to deliver our clients access to this growing asset class.”

Bloomberg reports that “a deep divide is opening up as investors focus their hopes on commodity exporters in the Middle East and Latin America” as they try to predict how reverberations of Russia’s invasion of Ukraine will play out in commodities markets. A major concern for investors and policymakers alike is how to keep inflation in check, especially as food prices rise quickly. Voya Investment Management Head of Emerging Markets Fixed Income Jean-Dominique Butikofer said of the market outlook, “Rising inflation, and more particularly food inflation, are giving emerging-market ministers of finance and central bankers growing headaches,” with commodity importers likely to see their budgets constrained if they are forced to subsidize food prices.

Bloomberg reports on the impact for developing markets of the rapid rise in inflation and war in Ukraine following the worst quarter for emerging-market dollar bonds in 24 years. The article notes that the rise in inflation and increasingly large potential rate hikes being considered by the Fed are drawing investors to commodity exporters in the Middle East and Latin America, and that this will likely make it more difficult for lower-income and commodity-importing nations to borrow as costs increase. The war in Ukraine has also made lenders more risk-averse, which is also likely to put pressure on borrowers. Goldman Sachs’s Andrew Tilton and Kamakshya Trivedi explained “The economic costs of Russia’s invasion of Ukraine and the resulting sanctions are likely to be both significant and highly asymmetric,” while Jean-Dominique Butikofer, Head of emerging markets fixed income at Voya Investment Management said “Rising inflation, and more particularly food inflation, are giving emerging-market ministers of finance and central bankers growing headaches.” He also “warned that the need to subsidize food prices will hit the budgets of commodity importers, especially as the risk of social unrest grows alongside households seeing their purchasing power diminish.”

IBS Intelligence reports Voya Investment Management “recently announced that it has partnered with iCapital, a leading global FinTech platform driving access and efficiency in alternative investing for the asset and wealth management industries.” Voya “will leverage iCapital’s customized technology, service and diligence solution for financial advisors and their high-net-worth clients seeking access to Voya’s alternative and private fund offerings, starting with Pomona Investment Fund.” Pomona Capital CEO Michael Granoff said of the new partnership, “As investors look to diversify their portfolios, providing access to PIF via a streamlined and efficient solution makes it easier to invest in private equity, leading to an improved experience for everyone involved in the investment process.”