An entity that started out as a means to help professors in the United States retire comfortably has grown and blossomed into a global investment manager with more than US$1.3 trillion (S$1.8 trillion) of assets under management.
Nuveen, which has a history going back more than a century, is the investment arm of the Teachers Insurance and Annuity Association of America (TIAA) - College Retirement Equities Fund.
The American asset management firm can tap TIAA's long track record of prudent investing aimed at bringing about positive social impact, as well as its experience in the alternative asset space, to help clients across Asia-Pacific and the rest of the world meet their investment goals amid a fast-changing environment.
Nuveen manages a broad range of assets across diverse asset classes, geographies and investment styles, offering solutions for institutional investors such as pension funds, insurance companies, sovereign wealth funds, banks and family offices.
According to a survey Nuveen conducted in March this year, such investors are concerned about extreme market events disrupting their investment strategies - and almost two-thirds (64 per cent) of those surveyed believe investors need to completely reconsider the construction of their portfolios.
To help investors navigate the uncertain road ahead, Nuveen provides its clients with a wide range of liquid and illiquid alternative strategies such as real estate, real assets (commodities, natural capital, infrastructure) and private capital, in addition to both traditional equity and fixed income assets.
Mr Simon England-Brammer, Head of EMEA & APAC Institutional at Nuveen, talks about how the investment management firm is helping institutions and private wealth clients realise their aspiration amid challenging conditions.
With concerns over inflation and rising interest rates, what are some of the solutions that clients are seeking?
The answer depends on client segments. For our traditional institutional clients, such as insurance companies and pension funds, the strategy of how they are deploying their capital, the diversification that they want, or the returns they seek hasn't changed. With rising inflation and interest rates, that may have slowed in certain sectors, but the direction of what they're trying to achieve remains the same.
On the private wealth side, there is a lot more focus on real assets and real estate. Not only is there a decent return profile to these asset classes, they also offer a natural inflation hedge.
Can you tell us about Nuveen's relationship with TIAA and how this differentiates the firm from other asset managers?
TIAA was formed back in 1918 as a pension fund for professors by industrialist and philanthropist Andrew Carnegie. He saw that many were retiring into poverty and he wanted to help them retire with some form of dignity. Today, TIAA is no longer a non-profit organisation, but that philanthropic streak remains part of the ethos of the business today.
Nuveen is the investment management arm of TIAA. Of the US$1.3 trillion in assets we manage, about half of that is our own proprietary capital belonging to TIAA's five million members. The remainder is third-party capital that we manage.
So, when we talk to the clients, our identity is that of an asset owner before being an asset manager. This means that our approach is very much being a partner, rather than trying to sell them something. We're talking to them as a peer because we are a balance sheet owner.
If we were going to invest in a Grade A office building in Singapore, for example, we would go to the market and say, "We have a sizeable portion of our own capital in the project and want you to come alongside us." That makes us very different to many other asset management companies out there.
Can you share more about Nuveen's expertise in alternative investments?
Alternatives will continue to be an area of tremendous opportunity for us. It is a combination of real estate in terms of equity and debt, as well as areas such as infrastructure and natural capital, but focused on specific themes within these segments.
When we talk to large institutions, their aspiration is to move into these particular asset classes and hope to get their allocations to around 20 to 25 per cent. But Nuveen's allocation in alternatives is already over 25 per cent. We are the world's largest farmland owner, and we are the fifth largest real estate business on the planet. Our first real estate deal was in 1937, so being in alternatives isn't new to us.
Then there are two areas which are going to be very prominent for us, which is private credit and ESG (environmental, social and governance). Private credit can mean a lot of things, but the key for us is going to be in mid-market loans. As for ESG, everyone is talking about it now, but this is not something new for us.
How does Nuveen differentiate itself in the area of ESG?
TIAA has been investing prudently and for positive impact since the 1970s. It just wasn't called ESG back then. Our members are teachers and professors, so it's not all about returns but also about demonstrating good.
ESG will continue to be a key part of the firm's growth in two areas: The first is
delivering capabilities directly linked to ESG, and the second is demonstrating that ESG is embedded in our investment process across all our asset classes. For example, in real estate, we want to make sure that our assets achieve the energy efficiency goals that we have set. And if they have not, we have the ability to refurbish those assets to meet the standards that we want from an ESG lens.
What are the expansion plans for Asia-Pacific?
Our main client segment in Asia-Pacific are institutional investors, with around 40 per cent of them made up of insurance companies. The rest is a good spread across sovereign wealth funds, central banks and corporate pensions.
In the past couple of years, we've been making more of a commitment towards the private wealth channel through global financial institutions. This will be another channel of growth for us.
When I joined Nuveen seven years ago, we had a small operation here in Singapore and another in Australia - both focused on real estate. We now have offices in Hong Kong and Japan, and we have expanded our operations in Australia and Singapore, too. We also have "outpost" people in mainland China investing for us.
In terms of asset classes, we are looking beyond real estate and into areas such as farmland, public equities and private credit. From an impact and ESG perspective, there will also be further commitments in these channels in Asia-Pacific.
Global asset management company Nuveen is strengthening its footprint in Asia-Pacific. Photo: Getty Images
Nuveen's recent real estate deals in Asia-Pacific
• The opening of a 483-bed building known as The Switch, Perth Central. Announced in March this year, it is the first project in Nuveen's Australian housing platform. Another property in Adelaide is scheduled to open in late May.
• The acquisition of a 50 per cent interest in One George Street, a Grade A office asset in the vicinity of Raffles Place, for US$472 million, as part of its Asia-Pacific Cities strategy.
• The addition of nine assets to its Asia-Pacific core investment strategy with the acquisition of a data centre in Hong Kong and a set of eight multi-family properties in Tokyo and Osaka.
Learn more about how you can leverage Nuveen's expertise to grow your wealth.
Keyword added to your list