TIAA-CREF to Acquire Nuveen Investments

The transaction will provide clients with additional investment choices and access to new products, according to the firms. Enhanced investment capabilities from the combination of TIAA-CREF and Nuveen will span both traditional and alternative investments (see “Nuveen Introduces Alternative Investments Unit”) comprising a diversified range of assets including equities, taxable and tax-exempt fixed income and credit strategies, commodities, real estate and real assets.

Nuveen has approximately $221 billion in assets under management. The addition of Nuveen brings TIAA-CREF’s total assets under management to approximately $800 billion. In 2013, Institutional Investor listed TIAA-CREF at number 20 on the list of the top 300 money managers; the addition of Nuveen will push it close to the top 10.

In 2012, TIAA-CREF acquired a majority stake in GreenWood Resources, Inc., a timberland investment management organization (see “TIAA-CREF Acquires Stake in Timber Asset Manager”).

TIAA-CREF is acquiring Nuveen from an investor group led by Madison Dearborn Partners, a private equity investment firm, for an enterprise value of $6.25 billion, inclusive of Nuveen’s outstanding debt. Nuveen will operate as a separate subsidiary within TIAA-CREF’s Asset Management business, retaining its current multi-boutique business model and continuing to support its investment affiliates through scaled distribution, marketing and administrative services. John Amboian will remain the chief executive officer of Nuveen, and Nuveen’s current leadership and key investment team will stay in place.

As part of its business, Nuveen provides defined contribution investment only (DCIO) services (see “Nuveen Expands DCIO Efforts”).

“We are pleased to bring our clients around the globe access to new investments and strategies through our partnership with an experienced, market-tested investment firm like Nuveen,” says Robert Leary, executive vice president, TIAA-CREF, and president, TIAA-CREF Asset Management. “In addition, Nuveen’s strong distribution network will give us growth and scaled presence in several important channels through relationships built around experienced investment managers with strong track records.” Leary was named head of the asset management business in May last year (see “TIAA-CREF Names Head of Asset Management”).

The boards of directors at both TIAA and Nuveen each have unanimously approved the transaction. The acquisition is expected to be complete by year-end 2014, subject to customary closing conditions.