TIAA-CREF plans to form a “standalone” real assets business unit, combining its agri asset manager Westchester, its timber subsidiary GreenWood Resources, TH Real Estate and Churchill Asset Management.
The Global Real Assets Division – as it will be known temporarily – will focus on global agriculture, timber, real estate, infrastructure and energy, and be led by head of private markets asset management Jose Minaya.
Minaya said the new division “will not impact our affiliates’ portfolio management activities, products or the integrity of our investment approach”. The team comprises 900 employees in 16 countries. Minaya will be based in New York.
The current chief investment officer of TIAA-CREF’s private markets group, Heather Davis, will be the division’s chief investment officer. The structure will allow the different teams to discuss wider investment approaches and widen their capabilities when it comes to real assets, while continuing to operate independently, a spokeswoman from TIAA-CREF told Agri Investor.
A spokeswoman for the firm said: “We’ve seen interest in real assets steadily increasing in recent years as a means of hedging against inflation, generating income and reducing risk in institutional portfolios. The success of recent fund closings such as our Global Timber Resources and Global Agriculture II investment partnerships demonstrate the significant appetite among institutional investors for real assets.” She added: “Affiliates and teams will work within TIAA-CREF’s multi-affiliate model as they always have but will be better aligned to meet common business goals and our top-line strategy.”
“The business draws on our strength and deep capabilities in real estate, agriculture, timber, energy, and infrastructure in order to provide clients with access to industry-leading strategies. The changes will enhance our ability to serve clients across geographies and investment needs,” Rob Leary, chief executive of Asset Management at TIAA-CREF.
The move follows TIAA-CREF’s acquisition of firms managing assets in which the pension fund invests, giving it the potential to commit funds to its wholly-owned asset managers. The managers all pursue long-term, buy-and-hold investing strategies.
TIAA-CREF has invested in natural resources and other real assets for more two decades. The recent Black River spin-out Proterra Investment Partners also grouped agriculture and timber under a natural assets strategy, with energy and natural resources. Aberdeen also groups its asset classes in a similar way.
“Institutional investors are increasingly allocating portions of their portfolios to real assets as part of their alternatives investment holdings, by increasing their exposure to different types of real assets such as timber, real estate, infrastructure, agriculture and energy. This new organizational structure better enables us to deliver our strategies in real assets to clients,” said TIAA-CREF asset management chief executive Rob Leary.