Nuveen is reorganising its real assets business by launching two new “pillars” focused on infrastructure and natural capital, respectively, to sit alongside its $133bn (€115bn) real estate platform.
Two of its subsidiaries, Westchester Group Investment Management and GreenWood Resources, will be consolidated to form Nuveen Natural Capital, while Glennmont Partners and AGR Partners will be combined with Nuveen’s existing private infrastructure platform to form Nuveen Infrastructure.
Nuveen Natural Capital will be led by Martin Davies, the CEO of Westchester Group, which has grown to become one of the largest farmland asset managers with $7.7bn under management, and will include the $1.5bn of timberland assets managed by GreenWood Resources.
Nuveen, the $1.2trn investment manager of TIAA, has been building up its presence in infrastructure markets in recent years and, at the start of 2021, acquired European renewable-energy specialist Glennmont Partners.
Nuveen Infrastructure will be built around its existing private infrastructure assets, Glennmont and its agribusiness AGR Partners, and will be led by Biff Ourso who has worked at Nuveen for 16 years.
The reorganised platform will launch in January next year, but the announcement comes two weeks after CBRE said its investment arm would combine its real estate and infrastructure businesses under one brand, CBRE Investment Management. In May, Manulife Investment Management announced plans to combine its real assets capabilities under the leadership of Christoph Schumacher.
Nuveen cited its own research – which found that more than two thirds of institutional investors plan to increase allocations to infrastructure, natural resources and other alternatives – in its decision to streamline its offering in real assets.
Asked about the timing and the rationale for the move, Mike Sales, CEO of real assets, said: “When I took over, about 18 months ago, I was really keen to bring those capabilities together with one shop window for the market”.
Bring together Westchester and GreenWood Resources, for instance, “given the land-based nature of both businesses, was a really sensible thing to do”, he said, and not something that many other organisations are in a position to replicate.
Nuveen Natural Capital will manage more than $9bn assets once the two businesses are combined, making it the second largest of the three pillars, after Nuveen Real Estate.
In infrastructure, Nuveen had been building up a private infrastructure portfolio on behalf of its parent TIAA, but is now looking to expand into third-party fund management – an objective that will be aided by the recent acquisitioin of Glennmont Partners.
“We already run money for our general account, but what we really wanted to do was grow the infrastructure business into being an institutional capability for third parties,” Sales said.
“We’re already working with Glennmont on three very interesting strategies that complement what they’re already doing.”
Sales said that, “as well as growing the Glennmont clean-energy business, we also want to grow our capabilities” in other areas of infrastructure, adding that this could be done “organically or inorganically”.
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