TIAA-CREF announced that it has successfully completed its acquisition of Nuveen Investments, a diversified investment management company.
“The closing of this transaction marks an exciting moment in TIAA-CREF’s 96-year history as a financial services firm committed to making a difference for those who make a difference in the world,” said Roger W. Ferguson Jr., president and chief executive officer of TIAA-CREF. “The addition of Nuveen Investments to the TIAA-CREF family further strengthens our position as a leading provider of financial services by enhancing our ability to deliver strong financial performance and serve our clients for the next 100 years.”
“Our investment in Nuveen further strengthens and diversifies TIAA’s General Account, which serves as a foundation for the savings and lifetime income payments for millions of our participants,” said Robert G. Leary, executive vice president, TIAA-CREF and president of the company’s Asset Management business, which includes both TIAA-CREF Asset Management and Nuveen Investments.
“The complementary investment offerings and strong distribution network that Nuveen Investments brings to TIAA-CREF will allow us to offer our clients a broader range of expertise and investment options than ever before.”
The closing, in aggregate, creates one of the world’s largest and most diversified financial services organizations that:
Manages approximately $844 billion in client assets, including approximately $111 billion in alternative investments; serves more than 5 million individuals and more than 16,000 institutions; and, features a product line-up that spans the asset class spectrum and includes retail mutual funds, closed-end funds and commodity exchange traded funds totaling $194 billion of assets.
Nuveen Investments will operate as a separate subsidiary within TIAA-CREF, retaining its brand and multi-boutique operating model. Nuveen Investments’ leadership and investment teams will remain intact, with John Amboian maintaining his role as chief executive officer. Carol Deckbar will continue to lead TIAA-CREF’s core asset management business as chief executive officer. Amboian and Deckbar will report to Rob Leary.
“We are excited to officially become part of the storied TIAA-CREF family and to add our leadership and diversified investment strategies and solutions to the firm’s multi-boutique platform,” said Amboian. “Together, we have formed a strong relationship that positions us well for the future.”
As of June 30, 2014, Nuveen Investments’ assets under management rose to $231 billion, an all-time high for the company. In the June quarter, Nuveen Investments’ mutual funds garnered $1.7 billion of net new inflows, driven by flows into a broad range of municipal and taxable fixed income strategies, representing a mutual fund organic growth rate of 12.3 percent from the prior quarter. Nuveen Investments is the market leader in closed-end funds and remains a leader in the retail managed account arena. The firm has significantly expanded its offering of high-caliber mutual funds over the past six years, more than doubling the number of non-municipal bond funds that it offers.
TIAA-CREF acquired Nuveen Investments from an investor group led by Madison Dearborn Partners for an enterprise value of $6.25 billion, inclusive of Nuveen Investments’ outstanding debt. In connection with the transaction, Nuveen Investments’ outstanding term loans, totaling approximately $3.1 billion, were repaid in full. The transaction was financed using a combination of debt and equity. On September 18, 2014, TIAA issued an aggregate of $2 billion in surplus notes, the proceeds of which were used to fund a portion of the acquisition price and for general corporate purposes.
The completion of the Nuveen Investments acquisition follows the successful close of the TIAA Henderson Real Estate joint venture in April 2014, as well as several other TIAA-CREF acquisitions in recent years including Westchester Group Investment Management (2010) and GreenWood Resources (2012).