Not-for-Profit Giant Buys Nuveen Investments

The not-for-profit TIAA–CREF has agreed to acquire Nuveen Investments for US$ 6.25 billion including debt from an investor group led by Chicago-based Madison Dearborn Partners. Madison Dearborn bought Nuveen for US$ 5.75 billion in 2007, taking it private. At the time, it was the largest leveraged buyout in the asset management industry. New York-based TIAA-CREF was keen on growing its mutual fund business and reached out to Madison Dearborn, the private equity owner of Nuveen Investments.

The deal would create another financial behemoth with around US$ 800 billion in assets under management, putting pressure against firms like BlackRock, Fidelity Investments, Putnam and Vanguard.

“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 Ferguson Jr., president and chief executive officer, TIAA-CREF, in a press 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.”

TIAA–CREF mostly operates on a not-for-profit basis. The integration of Nuveen will add a layer of operational complexity. TIAA-CREF has around US$ 570 billion in assets and they serve the academic and non-profit realms.

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