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By Greg Roumeliotis and Mike Stone
April 14 TIAA-CREF, an insurer and asset manager
focusing on workers at non-profit organizations, said it would
acquire fund manager Nuveen Investments for $6.25 billion,
seeking to expand its mutual fund and municipal bond offerings.
The deal will add more than $221 billion in assets to
TIAA-CREF's roughly $569 billion in assets under management,
broadening its portfolio with closed-end municipal bond funds
that offer regular, annuity-type payouts.
Robert Leary, president of TIAA-CREF Asset Management, said
his company is looking to sell more of its asset management
products through Nuveen's distributors.
It also offers relief to Nuveen's current owner, private
equity firm Madison Dearborn Partners LLC. Madison Dearborn will
break even on the deal, according to a person close to the firm,
having taken Nuveen private in 2007 for $5.8 billion and saddled
it with debt that weighed on its earnings.
The transaction comes at a difficult time for the municipal
bond market that many Nuveen funds invest in. Tax-free muni
bonds have been hit over the last year by the bankruptcy of
Detroit, fears of rising rates, and longer-term concerns about a
looming pension crisis among city and state issuers.
The deal is expected to close by the end of the year,
pending approval from existing Nuveen clients and antitrust
Lazard Ltd and J.P. Morgan Securities LLC
advised TIAA-CREF. Bank of America Merrill Lynch, Wells
Fargo Securities LLC and Citigroup Global Markets
acted as financial advisers to Nuveen Investments. UBS
Investment Bank, Goldman Sachs & Co and Moelis
& Co acted as financial advisers to the Nuveen management team.
(Reporting by Greg Roumeliotis and Mike Stone in New York;
Editing by Tom Brown)