US asset manager Nuveen will set up its first offices in Korea and Dubai and is assessing options for further expansion in China, after seeing its biggest annual inflow of client money in Asia this year despite the turmoil of the coronavirus pandemic.
Global chief executive Jose Minaya and Asia Pacific head Simon England-Brammer unveiled their plans and explained the $1.2 trillion firm’s strategy on an exclusive video call with AsianInvestor last week.
Nuveen has attracted net client inflows of nearly $9 billion in Asia Pacific, including the Middle East, this year. It has thereby more than doubled its 2020 target of $4 billion and grown its assets under management (AUM) in the region five-fold to nearly $30 billion from $6 billion in the last three years, said England-Brammer.
“We’re now getting to a point where we can start investing further [in Asia] because of the success we’ve had,” he added. “So going into 2021 and 2022, Nuveen will start to establish more on-the-ground platforms.”
This will include both sales and investment staff across public and private market strategies, thereby helping its parent – Chicago-based Teachers Insurance and Annuity Association of America (TIAA) – to further diversify its $276.4 billion general account portfolio.
A Korea branch is the next step, England-Brammer said. Nuveen will look to build out a presence in Seoul in the first quarter of next year. Chang Jae-Ho has been Hong Kong-based head of Korean institutional clients since 2017 and he was joined a few months ago by Kay Baik, a hire from Nomura.
"Korea is an obvious choice for us," England-Brammer said. Nuveen now manages some $6 billion across public and private assets for clients from the country's large pool of institutional investors.
It has also been building its investment holdings there, with the logistics sector a key focus. For example, Nuveen Real Estate recently acquired an 84,300 square metre last-mile logistics asset in greater Seoul for $122 million.
Elsewhere, Nuveen aims to set up its first Middle East branch late next year or in early 2022, said England-Brammer. He also oversees the region, which is home to several of the world’s largest sovereign wealth funds, some of which are already clients.
The new offices in Dubai and Seoul will add to its Asia headquarters in Hong Kong and branches in Australia, mainland China, Japan and Singapore.
“That will mean we’re not just flying in from Hong Kong,” England-Brammer said. “We are going to have regional and country heads, and local executives servicing clients in those markets.”
Moreover, the asset manager, which won AsianInvestor's Best Business Development award this year, sees its Shanghai branch as a base for investing into real assets in China and is assessing its options for growth there, he said.
Nuveen is continuing a steady regional buildout, having just opened the Tokyo branch last year, three years after hiring England-Brammer and two others from Invesco as its first Asia-based team. Japan represents its biggest business in the region, with some $12 billion in client assets.
INVESTMENT TEAM BUILDUP
The firm's approach has typically been to put in place sales staff first, then add investment professionals.
“We’ve been very strategic in terms of which countries and which client segments we focus our resources on,” said Minaya.
“As we go to Korea or the Middle East, we’ll start with distribution staff, because it’s about developing those relationships and saying ‘we can manufacture, how do we get it to you?’,” he added.
Minaya cited Japan as an example. “For a long time, we had about $2 billion [of client assets] in Japan. And now we are up to around $12 billion in just three years,” he said. “That was by putting more resources and people in place to develop those relationships.”
Indeed just last month Nuveen said Shusaku Watanabe had relocated from Singapore to Tokyo to become its first head of Japan real estate, joining a team of nine led by Japan head Michinobu Suzuki.
Another factor helping Nuveen gain traction in Asia is its status as a 'hybrid' institution, investing on behalf of both its asset owner parent TIAA and its external clients, Minaya said. “That alignment of interest plays very well.”
Nuveen has also been moving to expand into the private wealth segment, having hired Henry Chui from Pimco in March to spearhead that push.
But it does not have any plans to enter the traditional retail funds market, said England-Brammer. “That’s not a focus for us any time soon.”
Ultimately, it is far more labour-intensive to cover the retail segment than institutional clients, in terms of the size of headcount required to service intermediary firms.