TIAA-CREF Buys Nuveen, Vaults Up AUM League Tables

(April 14, 2014) — TIAA-CREF has paid $6.25 billion for Nuveen Investments and its $220 billion in assets under management (AUM), propelling it up the charts of the world’s largest money managers.

According to a release from the company, the combination of the two pools of assets will bring TIAA-CREF’s total to approximately $800 billion in AUM.

League tables compiled by investment consultant Towers Watson late last year showed the purchase will vault the firm into the top 20 money managers worldwide.

While the firm still sits behind the likes of BlackRock and Vanguard—firms with north of $2 trillion in AUM—TIAA-CREF will join the ranks of Wellington, Northern Trust, and Goldman Sachs as firms approaching the $1 trillion mark.

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Nuveen, previously owned by a group led by private-equity giant Madison Dearborn Partners, will operate as an independent subsidiary within TIAA-CREF’s asset management unit, according to the release.

“For nearly 100 years, we have been wise financial stewards for those who make a difference in the world in the academic and non-profit communities,” Roger Ferguson Jr., president and chief executive officer at TIAA-CREF, said in the release.

“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.”

(April 14, 2014) — PFA has increased its co-ownership of investment firm Kirk & Thorsen Invest from 16% of the firm to more than 30%, boosting the pension fund’s exposure to small and medium-sized enterprises (SMEs).

The pension fund, which also provides a loan facility available to Kirk & Thorsen Invest, said its investment decision was not driven by an idealistic desires to help the Danish economy, but by strong investment-related reasons.

CEO Henrik Heideby said in a statement: “Our primary task is, no matter what, to get our pension customers the best possible return. Therefore this kind of investment does not come at the expense of customers. We are not philanthropists, we need to invest in companies where we believe that there is a good return.

“We’d love to make similar investments in other investment companies, when we get this model tested by Kirk & Thorsen Invest. We want to support the Danish industry and Danish jobs. And with this model, I think that we, as a major institutional investor, will also have an opportunity to work on projects that are so small that it would normally keep us away from it.”

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Heideby added that the decision to invest in this strategic partnership with Kirk & Thorsen Invest was “very much” about the people at the top of the investment firm.

“Casper Kirk Johansen and Peter Thorsen have in recent years proved that they are both really passionate about it,” he said.

PFA has also invested two other enterprises designed to help Danish SMEs, Erhvervsinvest and SE Blue Equity.

“It’s an area we want to strengthen ourselves in,” Heideby added.

PFA has made headlines with other unusual investments in the past few months. In June last year, it snapped up Cantobank, a banking casualty from the financial crisis.

The pension fund took over the bank with the necessary permits to continue running it as a retail bank, allowing PFA to benefit from its connection with the Danish banking infrastructure.