While TIAA-CREF has $569 billion in AUM, it has yet to be considered a major mutual fund or DCIO provider, gathering most of its assets through the 403(b) plans it has record kept. That has now changed. With the acquisition of Nuveen and another $221 billion in AUM, TIAA-CREF has catapulted itself into the top 20 mutual funds, with a foothold in the DCIO market.
Nuveen is owned by the private equity firm Madison Dearborn, which recently bought NFP and had been preparing Nuveen for an IPO. TIAA-CREF had created a fledgling mutual fund and DCIO company, but distribution was limited, with no focused DCIO wholesalers working directly with advisors and very few retail wholesalers. Nuveen has a more robust retail network and a small DCIO field force, as well as distribution deals with most major record keepers and DC-focused BDs leveraging value-add tools and services. It is expected that Nuveen will operate as a subsidiary of TIAA-CREF.
Though consolidation has been focused on record keepers, BDs and advisory firms, it is expected to affect the DCIO market as well — although the Nuveen deal was more likely driven by retail considerations than by retirement ones.
