From partners to clients and back again: the TIAA/Nuveen relationship

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When I spend time with clients of TIAA and Nuveen, I am often asked about the relationship between the two organizations. As the Chief Investment Officer of the TIAA General Account (GA), I have the unique privilege of being a TIAA employee while working as a client directly with portfolio managers throughout Nuveen, because the GA invests its assets in funds and accounts managed by Nuveen.

In my role to oversee the investments and asset allocation of the GA, I sit in on Nuveen’s Global Investment Committee to discuss key issues such as income generation in a low yield environment directly with the investment leaders who manage the underlying GA assets.

The TIAA/Nuveen relationship

I’d like to offer some perspective on the Nuveen/TIAA relationship. In short, Nuveen is the asset manager for TIAA, one of the world’s most highly rated and financially stable insurance companies that provides retirement solutions for employees in the education, research, health care and other service industries in the U.S.

That means Nuveen is responsible for managing investment portfolios for a wide variety of individual and institutional investors around the world — including the TIAA General Account and its participants.

From my perspective as the GA CIO, I effectively “outsource” the underlying portfolio management of individual asset classes to the talented portfolio teams across Nuveen. My team and I set the overall asset allocation strategy, help manage TIAA’s balance sheet and look after the needs of our participants, while Nuveen’s investment teams manage our diverse portfolio of public assets (mostly fixed income instruments) and private assets (real estate, agriculture, timber and farmland equity, as well as private equity and credit).

On the same side as clients

It’s a truly symbiotic relationship: The GA and I benefit from Nuveen’s deep and diverse investment insights and portfolio expertise; Nuveen, by being closely aligned with a large and financially diverse asset owner, sits on the same side of the table as clients, serving them as a like-minded partner that truly understands their goals and needs. The underlying day-to-day nuances of how this actually works can be quite complex — and I look forward to discussing those specifics in future “Views from the GA.” At our midyear meeting, I was struck by how our clients and Nuveen’s portfolio teams were all grappling with reassessing portfolio risks, generating income in a low yield environment and the increasing need to incorporate environmental, social and governance factors into portfolios, as a way to generate alpha and manage risks. As a large institutional investor, we are dealing with the same issues.

The TIAA General Account and Nuveen have forged a connection that combines partnership and client relationship to benefit both organizations and also, critically, TIAA’s plan participants and Nuveen’s clients. As part of his participation in Nuveen’s Global Investment Committee, Nick Liolis offers his perspective as an institutional investor and asset allocator. Neither Nick nor any other member of the TIAA General Account team are involved in portfolio management decisions for any third-party Nuveen strategies.