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A client message from Jose Minaya, Chief Executive Officer, Nuveen
When John Nuveen founded his municipal bond shop in 1898, the world was a very different place. The most popular mode of transportation was horse-drawn carriage, more than 60% of the global population lived in rural settings, and infrastructure for water and electricity was mostly reserved for industry and the wealthy. As we start our 125th year of serving the needs of clients and communities, society has changed in incredible ways, but one thing hasn’t – our commitment.
Through world wars, pandemics, a great depression and periods of extraordinary social change, this firm has always found a way to meet the needs of clients in even the most challenging circumstances. Today, we’re facing the dueling forces of inflation and interest rate hikes that have turned what used to be a mostly academic conversation with clients about market volatility into something with far greater urgency. The COVID pandemic served as a catalyst for that conversation, placing a spotlight on the impact of everything from ESG and income inequality to company culture and supply chain disruption. But after many months of dramatic swings in both stocks and bonds, the number one question our clients are asking is, “What can we do about all the uncertainty?”
That’s a question we were asking ourselves even before the pandemic began. We believed that volatility in equity markets would eventually make its way around the world, so for years we’ve been talking with clients about the critical need for diversified portfolio construction and the opportunities that can be found in the right mix of public, private, traditional and alternative investments.
To turn those opportunities into reality, we’ve been building new capabilities and platforms to provide our clients with access to harder-to-reach investments. This past year alone we enhanced our real assets platform by launching Nuveen Natural Capital and Nuveen Infrastructure to sit alongside Nuveen Real Estate and meet the growing global demand for investments that are managed sustainably for the long term. We claimed a leadership position in private equity by launching Nuveen Private Capital after our acquisition of Arcmont, a leading European private debt investment manager, to sit alongside Churchill and expand our private capital expertise on both sides of the Atlantic. And we expanded our distribution capabilities and increased access to international markets by continuing to open offices in locations around the world. At a time when many asset managers were forced to pull back into a more defensive posture, we were able grow both our scale and scope across asset classes. Thanks to our long-term strategy and execution we find ourselves in an excellent position to serve our clients and be ready for whatever comes next.
Looking at the year ahead, we’ve seen an unusually wide range of forecasts and market predictions for 2023. But the one thing everyone seems to agree on is this: market volatility will continue. I believe it’s here to stay – probably for the rest of my career – because as I wrote last year, there is no such thing as a new normal, only constant change. The difference now is that there’s an urgency attached to it, and a pressure to make quick adjustments. While no one can stop or even slow the pace of change, we’ve made it our policy to focus on managing the things that are in our control.
We can control the construction of our portfolios and ensure they remain as diverse as possible. We can control the way we serve our clients, and in the year ahead we will continue to make investments in both talent and technology to ensure we’re delivering an exceptional experience. We can control how we invest, incorporating ESG and other factors in our processes to help us make appropriate risk-adjusted decisions across asset classes, products and AUM as we strive to deliver attractive, risk-adjusted results for our clients. And we can control who we are as a firm, remaining steadfast in our commitment to building a workforce that is both diverse and inclusive, because doing so will produce better results for our clients and our colleagues.
There will be headwinds throughout 2023, but with 125 years of managing through them by focusing on the things we can control, we know that we’re built for the volatility they will bring. More important, we know that we’re starting the new year on our front foot, ready to deliver results for our clients no matter what the economic environment is like. Experience is our strength, diversification is our advantage, and commitment to serving clients and communities remains our focus.
We thank you for your continued trust in our firm, and we look forward to helping you meet the challenges that this year will undoubtedly bring for all of us.
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