Nuveen Investments Forming Alternatives Arsenal

August 22, 2001 - (—Nuveen Investments, a wealth management giant catering to the high-net-worth and institutional clients, has formed an alternative-investment group that is in the process of developing new hedge fund products.

Alan Berkshire, Nuveen vice president, will head the effort, which was formalized only weeks ago. Mr. Berkshire oversees a team of roughly six professional staffers that are part of Nuveen Investments’ new institutional and alternative investments product development group, according to Laurel O’Brien, a spokeswoman for the firm.

Michael McGrath, who will be working as a director out of the firm’s New York offices joined the team this month. Mr. McGrath was previously a closed-end fund analyst for New York-based Gruntal & Co. He will report to Mr. Berkshire.

It was not immediately clear what types of alternatives the new Nuveen Investments group would be offering its high-net-worth clients. Other wealth managers that have migrated to hedge funds of late have included an investment mix that has ranged from single-manager funds and funds of funds to structured products.

“No specific products have been announced so far,” Ms. O’Brien said. “Things are at the developmental stage where options are being looked at.”

Nuveen Investments is a registered broker dealer and one of a half dozen subsidiaries of the John Nuveen Co. Nuveen products include mutual funds, exchange-traded funds (Previous HedgeWorld Story), structured notes, and separately managed accounts. These products are distributed through its subsidiaries as well as through outside wealth planners at consulting firms and banks.

Nuveen’s interest in hedge funds first became apparent in June, when the firm announced an agreement to purchase San Francisco-based Symphony Asset Management LLC from Berkeley, Calif.-based BARRA Inc. for $210 million. Previous HedgeWorld Story

Symphony oversees $4 billion in assets, managing market-neutral products and hedge fund strategies aimed at managing portfolio risk.

Nuveen’s entry into the alternative marketplace may be interpreted by some as further evidence of a coming of age for the maturing hedge fund industry. Although other traditional wealth managers have entered alternatives over the last year, few have been as big as Nuveen, which oversees $67 billion in assets.

Other traditional advisers and asset managers that have rushed into the hedge fund fray have done so to tap new revenue streams as the general markets have tumbled. But that doesn’t seem to be the case for Nuveen, which saw its revenues dip only 3% in the six month-period ending June 30, in part due to weaker sales of equity-defined portfolio products. The firm’s common stock hit a 52-week high of just under $66 last week.

Pete Gallo, Editor,


Story Copyright