04 Apr 2022
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Nuveen CLO Issuance Fund closes with over $375 million
The Nuveen CLO Issuance Fund, LP (the “Fund”) has closed with over $375 million in committed capital from global public and private pension plans, family offices and insurance companies. The Fund provides the opportunity to invest alongside Nuveen’s parent company, TIAA, the #1 not-for-profit retirement market provider1 with nearly $1.4 trillion in assets under management2. The Fund provides exposure primarily to the controlling or majority equity interests of multiple Nuveen new issue CLOs and CLO warehouses, as well as opportunistic holdings in legacy Nuveen CLO debt and equity tranches, via a private placement, commingled fund structure.
“The closing of our inaugural CLO equity fund is core to our mission of delivering compelling risk adjusted returns for our clients through a nimble and opportunistic approach. Over the coming months, the market will be seeing a lot more from the Nuveen leveraged finance team,” said Scott Grace, Head of Nuveen’s leveraged finance platform. “Since holding its initial close in August 2020, the Fund has quickly scaled, investing capital into the equity stakes of multiple new-issue Nuveen CLOs, CLO warehouses as well as debt and equity tranches of legacy Nuveen CLOs through the secondary market. The Fund capitalized on favorable conditions in the new issue CLO market, while taking advantage of market volatility by engaging in opportunistic trades in the secondary market on a selective basis.”
For over 15 years, including during the 2008-09 Global Financial Crisis and 2020 COVID-19 downturn, Nuveen’s retired CLOs have delivered an average net internal rate of return of over 20% to investors and have never missed an equity distribution due to an overcollateralization test failure3. We believe this performance can be attributed to actively managing credit risk and identifying the catalysts of both credit deterioration and, conversely, attractive total return.
“Our differentiated approach has been cycle tested and proven via our performance track record, active par building and consistent liability management, all while actively managing tail risk,” said Himani Trivedi, Head of Structured Credit and Lead Portfolio Manager for Nuveen leveraged finance issued CLOs and its investments in third-party managed CLOs with almost two decades of experience investing in CLO markets. “These qualities have enabled Nuveen to consistently achieve some of the best new issue cost of liabilities compared to our peers, including in the CLOs in which the Fund has deployed capital thus far.”
Nuveen’s leveraged finance platform is one of the industry’s largest and best resourced providers of high yield credit, broadly syndicated loans, CLOs and alternative credit strategies. The leverage finance team of 50+ investment professionals oversees $38 billion in AUM, including $11 billion in CLO AUM and has closed 33 CLOs in the past 15 years, providing clients with enhanced access to an asset class where scale, research depth and a focus on active management are critical to producing better results. As part of the broader Nuveen global fixed income platform, the leveraged finance team has access to substantially additive resources across various asset classes, which provides the team a holistic view of global fixed income markets. Additionally, the organization’s long history of investing meaningfully alongside our clients ensures strong alignment with their interests.
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1 As of Dec. 31, 2020. Based on data in PLANSPONSOR’s 403(b) Market Survey, which published in August 2021.
2 As of December 31, 2021 assets under management across Nuveen investment affiliates and TIAA investment management teams were $1,375 trillion.
3 Past performance is not a guarantee or a reliable indicator of future results. Average net IRRs are based on distributions to equity tranches net of fees and expenses. All starting cash flows use the cash outlay as described in their respective offering documents. The internal rate of return on an investment is the annualized compounded rate that was earned on the original capital since inception as defined by the offering documents. of payments missed. Cash flow data assume the equity was purchased at par and give no credit for net asset value (NAV) in active deals. Therefore, these figures may be biased toward an underestimation of actual realized returns for investors who purchased equity at a discount or for those outstanding deals with high portfolio NAVs. Certain vintages may contain small samples; therefore, the data might be skewed, and medians may be artificially low or high based on outliers.
2 As of December 31, 2021 assets under management across Nuveen investment affiliates and TIAA investment management teams were $1,375 trillion.
3 Past performance is not a guarantee or a reliable indicator of future results. Average net IRRs are based on distributions to equity tranches net of fees and expenses. All starting cash flows use the cash outlay as described in their respective offering documents. The internal rate of return on an investment is the annualized compounded rate that was earned on the original capital since inception as defined by the offering documents. of payments missed. Cash flow data assume the equity was purchased at par and give no credit for net asset value (NAV) in active deals. Therefore, these figures may be biased toward an underestimation of actual realized returns for investors who purchased equity at a discount or for those outstanding deals with high portfolio NAVs. Certain vintages may contain small samples; therefore, the data might be skewed, and medians may be artificially low or high based on outliers.
