Photo: Kallerna. BNY Mellon to Acquire U.S. Investment Manager Cutwater Asset Management
BNY Mellon has announced that it has reached an agreement to acquire Cutwater Asset Management, a U.S.-based fixed income and solutions specialist with a 20-year track record and approximately $23 billion in assets under management. Located in Armonk, NY, the firm is currently a wholly-owned subsidiary of MBIA Inc.
Upon completion of the deal, Cutwater will operate as part of BNY Mellon Investment Management and will work closely with, and be administered by, Insight Investment. Insight is one of BNY Mellon’s premier investment management boutiques and one of Europe’s leading investment managers. The addition of Cutwater’s capabilities will enhance BNY Mellon’s and Insight’s U.S. platform and abilities to offer specialized fixed income solutions.
Cutwater’s products and investment solutions include a wide range of fixed income strategies such as core, long duration, high yield, loans and absolute return strategies.
Curtis Arledge, CEO, BNY Mellon Investment Management, said, “BNY Mellon’s strategy is to deliver the most innovative solutions via the most talented investment managers to meet our clients’ objectives. Cutwater brings an impressive performance history, strong intellectual capital and an investment culture consistent with BNY Mellon’s. Given the unprecedented interest in the fixed income market at this time, we are excited by the opportunity to expand our investment offerings for clients as a result of this combination of fixed income capabilities.”
Abdallah Nauphal, CEO and CIO, Investments, Insight Investment, said, “Insight has grown by aligning our investment solutions with the needs of our clients. Cutwater’s strong U.S. domestic fixed income and solutions track record and experienced team will complement Insight’s strategy in the U.S. as we build upon our existing position as a European leader in liability risk management and fixed income. Working closely with Cutwater will augment our current fixed income capabilities, deepening our fixed income research and portfolio management expertise in the world’s biggest and most diverse credit market.”
Clifford D. Corso, CEO and CIO, Cutwater, added, “Cutwater is delighted to be joining a true global leader in the asset management industry. This union is a logical next step for Cutwater. We share a similar investment philosophy and approach designed to offer products and relevant client solutions.”
BNY Mellon Investment Management is one of the leading fixed income managers with a diversified portfolio of investment boutiques offering fixed income solutions. These include Standish Mellon Asset Management Company, LLC and Mellon Capital Management Corporation headquartered in the U.S.; Insight Investment, the Alcentra Group, and the Newton Group headquartered in the UK; and Meriten Investment Management GmbH headquartered in Germany.
The terms of the transaction were not disclosed. The transaction is subject to standard regulatory approvals and certain other conditions and is expected to close by the beginning of the first quarter of 2015.
With assets under management (AUM) of US$1.8 trillion the U.S. market for exchange-traded funds (ETFs) is more than three times that of Europe, and is growing at a faster rate. But there are signs that European ETFs are on the cusp of a new phase of growth, particularly in the retail market, driven by influential new entrants and a favorable regulatory climate, according to the October issue of The Cerulli Edge-Global Edition.
“Costs are coming down not only because of greater competition but also in response to the demands of retail investors using ETFs as strategic core holdings,” says Barbara Wall, Europe research director at Cerulli Associates.
“Although U.K. advisors have been slow to embrace ETFs post retail distribution review, a growing number are exposed to ETFs through model portfolios. Take-up is also gaining momentum in other European markets, notably Germany and the Netherlands. The shift will be given a significant boost by the Markets in Financial Instruments Directive.”
The smart beta bandwagon is also gathering pace amid growing demand for innovative passive investment strategies. Last year, ETFs employing smart beta approaches grew by 59% in the United States, and accounted for more than one-third of cash inflows into the asset class. Value and dividend strategies were popular with investors and advisors, accounting for 56.6% of U.S. smart beta exchange-traded products, while growth products account for a 21.7% marketshare.
“The advantages of ETFs are beginning to be felt in South America and Asia,” notes Angelos Gousios, a senior Cerulli analyst. “Exposure to China through Renminbi Qualified Foreign Institutional Investor (RQFII) ETFs has exploded since their launch just over two years ago, and allocations to cross-border ETFs by Latin American pension funds have grown on average 35% annually for the past four years, and are catching up with allocations to cross-border mutual funds.”
In LatAm, Mexico is home to the largest locally domiciled ETF market in Latin America with one-half of the region’s listed ETFs, and assets of US$6.2 billion, or almost two-thirds of the region’s total. Almost 60% of these funds are dedicated to equity strategies with the majority focused on the domestic market. The rest are fixed income.
In China, the market for RQFII ETFs appears to be thriving. The first was launched more than two years ago, but 16 are now trading on the Hong Kong stock exchange, and several more have been listed in New York and London. Cerulli believes that the RQFII ETF space will continue to gain traction as demand for exposure to China grows, and the RQFII program is likely to continue to be developed by the Chinese authorities as they strive to internationalize the renminbi.
Growth in USA
Cerulli estimates that 32.5% of ETF assets in the United States–which should surpass US$4.5 billion in 2015–are owned by U.S. institutions. Almost three-quarters (70%) of ETF providers say increased institutional adoption will be a major driver of growth over the next 12 months, which is a significant jump from 2013, when the figure was just 38%.
Michelle Boquiren. Foto cedida . Michelle Boquiren llega a Amundi como jefa de Distribución de Fondos en Estados Unidos
Amundi Distributors USA, LLC announced that Michelle Boquiren has joined the company, as Senior Vice President, Head of U.S. Fund Distribution. Amundi Distributors is a wholly-owned subsidiary of Amundi.
As Head of U.S. Fund Distribution, a new position, Ms. Boquiren is responsible for maintaining and deepening Amundi Distributors’ relationships with U.S.-based distributors and global distributors headquartered in the U.S.; managing existing and developing new partner relationships; and developing new fund solutions for investors. Ms. Boquiren will report to Stephen A. Eason, CFA, Chief Executive Officer and work primarily from Amundi Distributors’ offices in New York, New York.
Christian Pellis, Global Head of External Distribution, Amundi, commented, “We are delighted to welcome Michelle on board to head up Amundi Distributors’distribution business. Amundi, through its U.S. subsidiaries (Amundi Distributors USA, LLC and Amundi Smith Breeden, LLC) is firmly committed to its growth ambitions in the U.S. which is a key market. Michelle’s recruitment will strengthen Amundi’s footprint in the U.S.; she brings extensive experience in international fund distribution and I am confident that her contribution will help to take Amundi Distributorsto its next development phase.”
“We are pleased to have Michelle as the newest member of our team. Amundi is actively expanding its institutional and fund management business through its U.S. subsidiaries. With her 20 years of experience and many close relationships with key participants in the fund industry, Michelle is the ideal person to lead this expansion. I look forward to working with Michelle,” stated Mr. Eason.
Before joining Amundi Distributors, Ms. Boquiren held several senior management positions in business development and sales at Investec Asset Management for American and International client from 2006 to 2014. Prior to Investec, Ms. Boquiren was Managing Director, Origination and Distribution at Overture Financial Services, LLC. Earlier, she held product development and senior specialist positions at Merrill Lynch, Global Private Client Group. Ms. Boquiren began her financial services career at Philippine Commercial International Bank.
Ms. Boquiren holds an MBA in Finance, Dean’s List, from the Asian Institute of Management in Manila, Philippines. She earned a BA in Management, Dean’s List, from De La Salle University in Manila, Philippines.
Standard Life Investments highlights that we are still in a multi speed growth world with Europe in particular facing significant long-term adjustment challenges.
As the world’s second largest economy, the Eurozone matters a lot for global growth and it is important that European policy makers address the demand and supply-side problems that are limiting economic recovery.
Jeremy Lawson, Chief Economist, Standard Life Investments, said: “We believe that European recovery is still very weak. Draghi has finally acknowledged that fiscal policy has been too tight and accelerated structural and financial reforms are now needed to stop Europe being trapped in a low growth equilibrium. Unfortunately he only has control over one policy area – monetary policy – and the flaws in the Eurozone’s institutional design make it hard to achieve the right fiscal balance that is now required to get growth up and inflation back to target.
“The banking union also falls short of what is ultimately needed to allow the currency union to function better. With respect to structural reforms, the heavy lifting has to be done at the national level. Portugal and Spain are already reaping the benefits of the labour market reforms they have implemented but France and Italy continue to lag well behind. All of this implies that the Eurozone is at risk of suffering a lost decade in terms of living standards unless tough decisions are made.”
. Luis Gallardo nombrado nuevo CEO de Thinking Heads Americas
With determination to drive the expansion of Thinking Heads Americas, as of October 1st, the first operator in the Hispanic world specializing in the global market of ideas, Luis Gallardo, has been established as Chief Executive Officer and a member of the Board of Directors.
“Luis Gallardo is the perfect person to direct the expansion of Thinking Heads in the U.S. and Latin America, his multinational experience creating brands and strategic communication and marketing programs with global impact is unique and truly impressive,” notes Daniel Romero-Abreu, Founder and President of Thinking Heads Group.
Luis Gallardo will be building the capacities needed to win the confidence of a potential of US$ 2.5 billion market including in-person, digital, literary and trending content, aspiring to turn Thinking Heads into a Thought Leadership Hub on a global scale through the development and exploitation of its unique model for managing personal positioning.
The Board of Directors of Thinking Heads Americas also features prominent personalities from the world of finance in Miami such as JoseCastellano, director of Pioneer Investments, Eduardo Rabassa, director of Amrop Seeliger and Conde US, as well as Eric Bergasa, partner at Tagua Capital; Alex Blochtein, international manager of Nortek; Pete Pizarro, CEO at Whitney International University Systems; Ignasi Puig, CEO at SCPF America; Gustavo Cisneros and Steven Bandel, President and Vice President of Cisneros.
For the past two years, Luis Gallardo has been acting president for consumption and brand marketing at Burson-Marsteller for EMEA, as well as Director of Global Brand Strategy at BAV Consulting, both companies in theYoung & Rubicam group. From 2004 to 2012 Luis Gallardo was Global CMO at Deloitte, where he directed brand, marketing and communication strategy in more than 150 countries. Luis is also a counsellor for tech and entertainment start-ups such as Webrand, Shore and Hollywood Domino.
He is the author of, Brands & Rousers, The Holistic System to Foster High Performing Businesses, Brands & Careers, which was awarded the Axiom silver medal as the best marketing book in the world in 2013. Luis Gallardo holds an MBA from IMD in Switzerland, and a Master’s in International Relations from the University of Lancaster in the United Kingdom.
Shaping The Word Through Ideas
The premiere of Thinking Heads Americas in Miami will be on October 27, 2014. This very special moment will feature the presence of Felipe Gonzalez, President of Spain from 1982 to 1996, as well as Adriana Cisneros, CEO and Vice-Chairman of Cisneros. The two of them will hold a colloquium on the role of “multilatinas” in the emerging economic and social regional setting,moderated by Andres Oppenheimer, political analyst for CNN and Editor of The Miami Herald, with a cocktail reception following reflection and networking.
About Thinking Heads Americas
Thinking Heads Americas puts into practice the methodology that has won the confidence of some of the world’s most prestigious minds: personal positioning management through the generation and dissemination of knowledge. Thanks to this, personalities such as Felipe Gonzalez, Ricardo Lagos and Jose Luis Rodriguez Zapatero have managed to get in contact with those institutions that demanded their ideas to improve the environment in which they operated. And most important of all: always calling on the capacity for reflection and thought of the audience to whom they were addressed.
Thinking Heads Group has managed more than 6,000 public appearances and has made its digital content for audiovisual production into a successful training supplement for thousands of executives and companies. It has, moreover, guided and promoted the works of hundreds of authors, and planned the personal positioning strategy of more than 80 personalities from a variety of settings. Some of the distinguished figures include economists Jose Carlos Diez and Carlos Rodriguez Braun; attorney and former government minister, Ana Palacio; athletes Toni Nadal and Emilio Butragueno; the philosopher Jose Antonio Marina; journalist Pedro J. Ramirez and artist Theo Jansen, as well as a variety of personalities from the world of business, science and thought.
Ken Taubes, director de Inversiones de Pioneer Investments en EE. UU., y portfolio manager de Pioneer Strategic Income Fund, Pioneer Bond Fund, y Pioneer Multi-Asset Real Return Fund. Pioneer Investments nombrado “Administrador del Año de Renta Fija Global” por la Revista Global Investor
Pioneer Investments has been named ‘Fixed Income Manager of the Year: Global’ by Global Investor magazine’s Investment Excellence Awards 2014, recognizing the strength and depth of its Fixed Income range across Europe, the U.S. and Emerging Markets.
This prestigious award is based on key achievements over the last 12 months and attributes that separate an asset manager from peers/competitors, with a particular focus on innovation, performance and ability to adapt to the market environment.
Pioneer Investments highlights the firm’s key strengths in US Fixed Income:
Philosophy– A clearly articulated and consistent investment approach
Organization– The nurturing of intellectual freedom in the organization
People– Aligning the goals and aspirations of all investment professionals towards one common good – the pursuit of competitive investment results
Two common problems with Investment Management Organizations
The investment management industry appears to have evolved into two models: the boutique, which offers a small set of focused strategies, or the behemoth, which attempts to provide everything under the sun.
Sector Advocacy is an industry phenomenon that results when investment analysts stop viewing their sector in terms of its role in an overall strategy and start to endorse its role in all investment environments, no matter what.
Investment Myopia occurs when an investment analyst’s universe of subject coverage shrinks, his or her focus turns inward, and intellectual silos develop that impact the sharing of information within the context of the strategy.
A Better Way: Review, Rethink, Rebuild
To deal with the problems of sector advocacy, investment myopia and the consequences of unintended bets, Pioneer Investments started from a clean slate with the arrival of Ken Taubes, Head of Investment Management US, in 1998. Ken’s prior experience with a large asset manager led him to believe that most large asset managers, for many of the previously stated reasons, were poorly implementing the traditional multi-sector fixed income strategy. Thus, Pioneer Investments embarked upon a radical rewrite of the traditional script.
The Investment Organization is Formed Around Three Guiding Principles
Establish a Unified Approach: To break the psychology of sector advocacy Pioneer Investments attemps to 1) align analyst and manager incentives to portfolio performance, not just individual contribution, and 2) provide multiple sector and asset class responsibility, so that analysts and portfolio managers do not need to advocate for a bond or sector in order to justify their existence to the organization.
Optimize Organizational Scale: To promote communication between professionals in different areas and to facilitate the sharing of thoughts and ideas, the asset manager aims to keep the US side of the organization lean. As a result, they keep the entire investment team on one floor in their Boston office and encourage free-flowing communication through regular, all- staff investment meetings. This has the added benefit of allowing to assign more sectors and asset class responsibilities to analysts and portfolio managers, reducing their fear of being intellectually side-lined when a sector or asset class is out of favor.
Promote “Outside-of-the-Box” Thinking: One of the consequences of sector advocacy can be intellectual rigidity. Pioneer Investments encourages analysts and portfolio managers to seek out ideas more broadly, across geographies, capital structures and sectors. For instance, new ideas for our US taxable portfolios may come from the US tax-exempt area or from the high yield area or the mortgage- and asset-backed analysts. A subtle yet powerful outcome of Pioneer Investments’ organizational thinking has been the extremely low staff turnover in the 13-plus years that Ken Taubes has headed the US Fixed Income team. The reason is simple: most investment professionals enjoy working in an organization that provides a wide degree of intellectual freedom and promotes teamwork versus intellectual monopolization and cut-throat competition.
Banque Internationale à Luxembourg (BIL) has appointed Thierry de Loriol as chief executive of its Swiss operations in charge of BIL’s private banking and wealth management activities.
Adrian Leuenberger, member of BIL Group’s management board and head of wealth management commented: “At a time when many firms are retrenching from private banking and wealth management, we are making advances. Thierry is a talented and experienced individual, and a welcome addition to our management team as we seek to deepen our footprint in Switzerland and internationally.”
De Loriol joins Banque Internationale à Luxembourg (Suisse) SA, BIL’s Swiss subsidiary, with over 20 years’ experience in international investment and private banking. He most recently worked with Banque Cramer & Cie as an adviser to the board and held senior management posts with the Swiss banks Clariden Leu, Banque de Dépôts et de Gestion and Sinara Capital Management.
He takes over from Michel Wohl, who is moving to become adviser to the board of directors of BIL Suisse. Thierry de Loriol will chair the management board, whose other members comprise vice chairman Alfons Widmer and chief financial officer Rolf Tresch.
Following an explosive re-rating in 2013 that saw the Tokyo Stock Price Index (TOPIX) gain approximately 51% (in local currency terms), we have seen a reversal of Japan’s equity markets so far this year. This has led some investors to question the efficacy of “Abenomics.” With the recent announcement of Prime Minister Shinzo Abe’s revamped growth strategy, Kenichi Amaki, Portfolio Manager at Matthews Asia, believes it’s a good time to reassess the impact of his economic plan, and consider what the future may hold.
There are literally hundreds of components that comprise Abenomics but one successful area has been job creation. Since it took over at the end of 2012, the Abe administration has created more than 1 million new jobs, with more likely to come given the robust growth in job offers. Discouraged job seekers who had previously left the labor pool have begun to re-enter the workforce. Critics often note that many of these jobs are at the low end of the wage curve in primarily part-time jobs but for the incremental worker and the economy as a whole, a job at a low wage is better than no wage at all. Supported in part by these job gains, corporate earnings have remained robust. The bottom-up picture appears fine as better earnings and share price underperformance have made valuations in Japan that much cheaper.
Nevertheless, macroeconomic statistics point to some emerging challenges on the horizon, near term. Amaki notes that judgments should not be made based solely on the numbers from the first two quarters of 2014, as they are heavily distorted by the tax hike. However, it still would seem fair to say that the tax hike has dampened consumer sentiment while causing a stiff decline in real household incomes and spending. The major issue behind this is wage growth, which remains muted. Improved corporate earnings have led to wage increases at many larger listed businesses, but smaller and medium-sized enterprises, which employ the vast majority of Japan’s workers, have been more reluctant to raise wages. Wages remain the main hurdle on the path toward sustainable consumption-oriented growth and more concrete steps to address labor regulation must be undertaken.
Meanwhile, over the past year, inflation has turned higher. At the end of 2012, Japan’s consumer price index excluding fresh food—the Bank of Japan’s preferred inflation benchmark—was -0.2%. But by the end of 2013, that had advanced to +1.3%, quite a big change in just 12 months. According to Amaki, this transition to an inflationary environment is slowly starting to change corporate mindsets. In aggregate, Japanese companies have been sitting on piles of cash, which would lose value in real terms in an inflationary world. Share buybacks announced so far in 2014 have already surpassed 2013. We’ve seen companies raise dividends and more have started to set specific dividend payout ratios in lieu of “stable dividends” (i.e. investors get whatever companies feel like paying).
At the same time, measures to strengthen corporate governance are being put forth By the middle of next year, Prime Minister Abe intends to establish a corporate governance code that will require, amongst other things, stronger oversight by independent directors. Of course, better governance is no guarantee of success but it should, on average, improve the quality of decision-making that goes on inside Japanese board rooms.
The potential for productivity enhancement induced by better corporate governance is enormous. According to Kenichi Amaki, productivity improvements will be the most important driver of growth for Japan going forward. Currently, productivity of Japan’s manufacturing and non-manufacturing sectors, as measured by output per worker per hour, remains far lower than the U.S., as highlighted in the chart below. Why? Pretty simple: over a decade of deflation caused by oversupply. There are many sectors of Japan Inc. that remain simply too fragmented and companies have little or no pricing power. Such fragmentation causes duplication of capacity and development costs, while keeping competition unnecessarily high, lowering selling prices and profitability.
In addition to consolidation, the emergence of Internet-based services with disruptive business models can also make an impact on productivity. These new companies don’t carry the legacy costs that plague many incumbent players. Recently, there is evidence that risk-taking is creeping up as Japan’s entrepreneurs attract more capital. Through June, Japanese start-ups attracted 32% more investment from venture capital firms compared to last year. Despite this year’s stagnant markets, investor appetite for new IPOs has remained resilient and venture capital funds seek to seize this opportunity. A government initiative to allow state-owned universities to set up venture capital funds that will invest in the commercialization of innovative research is also being set forth.
Improving productivity in Japan will involve making many difficult choices. For many years, managers have opted to kick the can down the road. But there isn’t much road left anymore. “These developments have me feeling more optimistic over the prospects for Japanese companies over the medium term”, concludes Amaki.
You may access the full article by Kenichi Amaki, Portfolio Manager at Matthews Asia, through this link.
Photo: Mike Strande . Henderson Global Investors Completes Purchase of Geneva Capital Management
Further to the announcement on June 30, 2014, Henderson Global Investors has completed the acquisition of Geneva Capital Management. Founded in 1987, Geneva has assets under management (AUM) of $5.4 billion in US growth equities.
This is an important strategic milestone in the development of Henderson’s North American business, adding US equity investment capabilities and extending its US institutional client base. Clients representing over 90% of Geneva’s AUM have agreed to the transaction.
Geneva’s long track record managing US growth equities, underpinned by a disciplined and consistent investment process, fills an important capability gap for Henderson.
The transaction doubles Henderson’s number of US-based investment professionals and quadruples Henderson’s US institutional AUM to around $8 billion. It also brings proven institutional distribution capabilities to complement Henderson’s successful retail franchise, creating a well-balanced client base, split broadly equally between retail and institutional.
Geneva will continue to employ the same rigorous investment philosophy and process that has been in place since 1987. Its commitment to high quality investment strategy and attention to client service will remain unchanged, and it will continue to operate from Milwaukee, Wisconsin.
Nicholas Bauer, responsible for Geneva’s distribution, will now head US Institutional Distribution as part of an integrated team reporting to Chuck Thompson, Head of North American Distribution. Nicholas’s extensive institutional experience will be an excellent complement to Henderson’s growing North American distribution network.
Andrew Formica, Chief Executive of Henderson, said: “The acquisition of Geneva supports our growth ambitions as a global asset manager. It increases our assets under management in the US by approximately 50%, adds investment management expertise in US equities and extends our US institutional client base.
“Clients of both Henderson and Geneva will benefit by gaining access to a wider investment universe while being supported by the resources of a global pure play asset manager.”
Henderson’s North American business continues to grow rapidly, doubling its AUM since 2011. Its Henderson Global Funds mutual funds family reached $10 billion in AUM for the first time in May 2014.
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).
