TIAA-CREF is to form a business unit focused exclusively on expanding its capabilities in real assets.
The new division will include TIAA-CREF’s global real estate, agriculture, timber, infrastructure and energy teams, as well as subsidiaries TH Real Estate, Westchester Group Investment Management, GreenWood Resources and Churchill Asset Management.
It will operate as a stand-alone business unit within TIAA-CREF’s global asset management business.
Rob Leary, chief executive of asset management, said: “Institutional investors worldwide are increasingly turning to real assets as part of a broader focus on alternative investments, which can provide a source of uncorrelated returns.
“TIAA-CREF has a long history of finding innovative investment opportunities across this asset class, and the launch of our Real Assets business will enable us to enhance our capabilities and diversify investment options for our clients and investors.”
TIAA-CREF currently manages approximately $100bn (€92bn) in real assets, as of 31 December.
Jose Minaya – currently head of Private Markets Asset Management, where he built out teams for agriculture, timber, energy and infrastructure – will serve as president.
Heather Davis, CIO at TIAA-CREF’s Private Markets Group has been appointed CIO of the new division.
John MacCarthy, chief legal officer at Nuveen Investments for the past 10 years, has been appointed COO.
Minaya said the new set-up would allow TIAA-CREF to develop all aspects of its real assets business more effectively, “so we can best leverage our distinct expertise in this space and better serve our investors, which have grown beyond our retirement base to include sovereign wealth fund, pension fund and insurance company clients”.
“These changes,” he added, “will enable us to take a more nimble approach for our business and accelerate our speed-to-market with transactions and products. Importantly, they will not impact our affiliates’ portfolio management activities, products or the integrity of our investment approach.”
Meanwhile, Tom Garbutt, head of TIAA-CREF’s global real estate business, has announced his intention to retire.
He will remain as an adviser during a transition period, working with the global real estate team.
Phil McAndrews, CIO for global real estate, is also leaving the company after a period of transition to pursue other opportunities.
As reported last year, James Darkins retired as CEO. Mike Sales, managing director for Europe, took over as head of TH Real Estate.
TIAA-CREF’s move follows that of BlackRock, which recently announced it was creating a real assets group as part of a wider reorganisation, with the move taking effect this month.
The new real assets group will be headed by Jim Barry and combine infrastructure and real estate, as clients see these areas “as a distinct and more integrated asset class”.