New York-based TIAA-CREF is buying Nuveen Investments, the debt-saddled parent company of Santa Barbara Asset Management, for $6.3 billion.
The purchase of Nuveen from Madison Dearborn Partners adds $221 billion in assets to the balance sheet of TIAA-CREF, which manages retirement accounts for teachers. The deal would create a firm with about $800 billion in assets under management, moving TIAA-CREF up the ranks of the U.S.’s biggest wealth management firms.
Chicago-based Nuveen purchased Santa Barbara Asset Management for $50 million in cash in 2005. Nuveen, in turn, was purchased by Madison Dearborn in a 2007 leveraged buyout for $5.8 billion, setting a record at the time for the largest buyout of a U.S. asset manager and loading the firm’s balance sheet with high-interest debt.
Last year, longtime Santa Barbara Asset Manager executive Michael Mayfield retired after 18 years with the firm and portfolio manager James Boothe was promoted to chief investment officer. The firm also vacated its fifth-floor offices in the El Paseo building at 820 State St. and moved into a less prominent space on the second floor of 925 De La Vina St.
“Nuveen will operate as a separate subsidiary within TIAA-CREF’s Asset Management business, retaining its current multi-boutique business model and continuing to support its investment affiliates through scaled distribution, marketing and administrative services,” the New York asset manager said in an April 14 statement. “John Amboian will remain the CEO of Nuveen, and Nuveen’s current leadership and key investment team will stay in place.”
Madison Dearborn was advised by Morgan Stanley, Deutsche Bank AG and Royal Bank of Canada in the deal with TIAA-CREF.
Bank of America Corp., Wells Fargo & Co. and Citigroup are the bankers for Nuveen Investments. UBS AG, Goldman Sachs Group and Moelis & Co. advised Nuveen’s management.