TIAA-CREF Scores $6.3B Deal to Buy Nuveen Investments

TIAA-CREF, a major player in retirement and financial services, announced a $6.25 billion deal to buy Nuveen Investments on Monday, creating a firm with almost $800 billion in assets under management.

Nuveen has been a private company since it was acquired by Madison Dearborn Partners for $5.75 billion in 2007. The firm now manages $221 billion in assets and logged revenue of more than $1 billion last year.

The transaction must receive approval from regulators and Nuveen clients. TIAA-CREF expects the deal to close by the end of the year but didn’t specify how it will finance the acquisition, which includes Nuveen’s outstanding debt.

TIAA-CREF primarily serves academic and non-profit clients who invest in the firm’s retirement savings plans. It also sells life insurance and low-cost mutual funds to its 4.8 million individual clients.

The addition of Nuveen will make TIAA-CREF one of the largest money managers in the U.S. The current leader, BlackRock (NYSE:BLK), has about $4 trillion under management.

According to TIAA-CREF, Nuveen will be operated as a separate subsidiary.

John Amboian will remain CEO of Nuveen, and the rest of the company’s leadership will stay in place as well. Former BlackRock and Bank of America (NYSE:BAC) Merrill Lynch executive Bob Doll is Nuveen’s chief equity strategist and senior portfolio manager.

“The acquisition of Nuveen can generate greater returns that will benefit our customers,” Roger W. Ferguson Jr., TIAA-CREF’s president and chief executive officer, said in a statement. “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.”

Lazard and J.P. Morgan Securities acted as financial advisors to TIAA-CREF.  BofA Merrill Lynch, Wells Fargo Securities and Citigroup Global Markets served as advisors to Nuveen, while Madison Dearborn Partners had an advisor team of Morgan Stanley, Deutsche Bank and RBC Capital Markets.