TIAA-CREF is to acquire Nuveen Investments, a diversified investment management company with approximately $221 billion in assets under management. TIAA-CREF is acquiring Nuveen from an investor group led by Madison Dearborn Partners for an enterprise value of $6.25 billion, inclusive of Nuveen’s outstanding debt.
TIAA-CREF, a leading financial services provider, announced today an agreement to acquire Nuveen Investments (“Nuveen”), a diversified investment management company with approximately $221 billion in assets under management. The acquisition further strengthens TIAA-CREF as a leading provider of retirement and financial services and significantly expands the products and services available to help customers achieve financial well-being at all stages of their lives. Additionally, the transaction adds diversification to TIAA-CREF’s investment and distribution platform while bolstering its award-winning mutual fund offerings.
“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.”
Nuveen, a trusted industry leader, will benefit from the enhanced resources, scale and strength that the transaction will add to its platform. Nuveen’s clients and the advisors and consultants who serve them will continue to benefit from the firm’s and its affiliates’ commitment to high quality performance, integrity and client service.
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.
The transaction enhances TIAA-CREF’s position as a world-class financial services organization with broad market presence. TIAA-CREF and Nuveen have highly complementary investment capabilities and distribution reach across a wide range of retail and institutional client segments. The addition of Nuveen brings TIAA-CREF’s total assets under management to approximately $800 billion1 .
“For nearly a hundred years, we have been wise financial stewards for those who make a difference in the world in the academic and non-profit communities,” said Roger W. Ferguson Jr., president and chief executive officer, TIAA-CREF. “The acquisition of Nuveen can generate greater returns that will benefit our customers. This transaction reinforces our position as a leading diversified financial services organization with a broad mix of product offerings to serve clients today and those in retirement for decades to come.”
“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,” said 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.”
“We are delighted to partner with TIAA-CREF, which stands among the most highly respected financial institutions and possesses an unparalleled pedigree in retirement services and investment management,” said John Amboian, chief executive officer, Nuveen Investments. “The clients of Nuveen, and each of our investment affiliates, will benefit from TIAA-CREF’s support of our multi-boutique approach and from the continuity of our client services, our brands and our professionals, whose interests will remain strongly aligned with our long-term success. Nuveen and TIAA-CREF share similar values and the same high standards of service and we are excited about the opportunity to further serve our clients.”
Mr. Amboian continued: “The Nuveen team and I also would like to thank Madison Dearborn for their support and guidance in helping us advance our strategy and grow our business even in the midst of a very challenging and competitive market environment.”
“We are proud of the accomplishments Nuveen has made in recent years and its status as a provider of top performing investment funds,” said Sam Mencoff, co-chief executive officer, Madison Dearborn Partners. “TIAA-CREF is the right home for Nuveen and its investment affiliates moving forward. We thank John and his team for their partnership and we wish them well as Nuveen enters this exciting new chapter.”
The transaction will provide clients with additional investment choices and access to new products. Enhanced investment capabilities from the combination of TIAA-CREF and Nuveen will span both traditional and alternative investments comprising a diversified range of assets including equities, taxable and tax-exempt fixed income and credit strategies, commodities, real estate and real assets.
The transaction gives TIAA-CREF two award-winning mutual fund complexes with $181 billion2 of aggregate AUM. This year, for the second year in a row, TIAA-CREF was named by Lipper as the Best Overall Large Fund Company3 , a distinction separately awarded to Nuveen in 2012. Additionally, ninety-eight percent of TIAA-CREF’s mutual funds receive an overall Morningstar rating of three or more stars across all asset classes (As of March 31, 2014, 41% have 3 stars, 42% have 4 stars, and 15% have 5 stars)4 . Ninety percent of Nuveen’s funds have an overall Morningstar rating of three or more stars across all asset classes as of March 31, 2014.
The boards of directors at both TIAA-CREF and Nuveen each have unanimously approved the transaction. The acquisition is expected to be complete by year-end 2014, subject to customary closing conditions.
Lazard acted as lead financial advisor to TIAA-CREF and J.P. Morgan Securities LLC also acted as financial advisor to TIAA-CREF.
BofA Merrill Lynch, Wells Fargo Securities, LLC and Citigroup Global Markets acted as financial advisors to Nuveen Investments. UBS Investment Bank, Goldman Sachs & Co. and Moelis & Company acted as financial advisors to the Nuveen management team.
Morgan Stanley, Deutsche Bank and RBC Capital Markets acted as financial advisors to Madison Dearborn Partners.
TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with approximately $569 billion in assets under management (as of 3/31/14)5 and is the leading provider of retirement services in the academic, research, medical and cultural fields.
About Nuveen Investments
Nuveen Investments provides high-quality investment services designed to help secure the long-term goals of institutional and individual investors as well as the consultants and financial advisors who serve them. Nuveen markets a wide range of specialized investment solutions which provide investors access to capabilities of its high-quality boutique investment affiliates— Nuveen Asset Management, LLC, Symphony Asset Management LLC, NWQ Investment Management Company, LLC, Santa Barbara Asset Management, LLC, Tradewinds Global Investors, LLC, Winslow Capital Management, LLC and Gresham Investment Management LLC, all of which are registered investment advisers and subsidiaries of Nuveen Investments, Inc. In total, Nuveen Investments managed approximately $221 billion as of December 31, 2013. For more information, please visit the Nuveen Investments website at www.nuveen.com.
About Madison Dearborn Partners
Madison Dearborn Partners, based in Chicago, is a leading private equity investment firm in the United States. Since Madison Dearborn’s formation in 1992, the firm has raised six funds with aggregate capital of over $18 billion and has completed approximately 125 investments. Madison Dearborn invests in businesses across a broad spectrum of industries, including financial and transaction services; basic industries; business and government services; consumer; health care; and telecom, media and technology services. Its noteworthy investments include Asurion, CDW Corporation, EVO Payments International, Fieldglass, National Financial Partners, Nuveen Investments, and Sage Products. For more information, please visit www.mdcp.com.
1 Based on assets under management across Nuveen Investments affiliates and TIAA-CREF investment management teams as of December 31, 2013 and March 31, 2014, respectively.
2 Based on assets under management across Nuveen Investments affiliates and TIAA-CREF investment management teams as of December 31, 2013 and March 31, 2014, respectively. Includes Mutual Funds (closed- and open-end) and ETFs. Excludes money market strategies, separate accounts, variable annuity products (including CREF variable annuities), non-registered funds and foreign domiciled funds. CREF Accounts AUM is approximately $227 billion as of March 31, 2014.
3 The Lipper Award is given to the group with the lowest average decile ranking of three years’ Consistent Return for eligible funds over the three-year period ended 11/30/12 and 11/30/13, respectively. TIAA-CREF was ranked against 36 fund companies in 2012 and 48 fund companies in 2013 with at least five equity, five bond, or three mixed-asset portfolios. Past performance does not guarantee future results. For current TIAA-CREF product performance and rankings, please visit the Research and Performance section on tiaa-cref.org.
4 Morningstar is an independent service that rates mutual funds. The top 10% of accounts in an investment category receive five stars, the next 22.5% receive four stars, and the next 35% receive three stars. Morningstar proprietary ratings reflect historical risk-adjusted performance and can change every month. They are calculated from the account’s three-, five- and ten-year average annual returns in excess of 90-day Treasury bill returns with appropriate fee adjustments, and a risk factor that reflects mutual fund/subaccount performance below 90-day T-bill returns. The overall star ratings are Morningstar’s published ratings, which are weighted averages of its three-, five- and ten-year ratings for periods ended March 31, 2014.
5 TIAA-CREF’s AUM as of 3/31 does not include the addition of assets from the TIAA Henderson joint venture, which closed on April 1, 2014. With the addition of those assets TIAA-CREF has approximately $591 billion in assets under management.
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