Trillion-dollar US asset manager Nuveen seeks partnerships with Middle East sovereign funds

Company's regional portfolio of assets could grow tenfold to $30bn in the next five years, chief executive tells The National

Bill Huffman, chief executive of Nuveen, says the company is looking to expand its regional footprint. Antonie Robertson / The National

US asset manager Nuveen is seeking co-investment opportunities with clients in the Middle East, including sovereign wealth funds, and expects its regional portfolio to surge up to $30 billion in the next five years, its chief executive has said.

Chicago-based Nuveen, which has $1.3 trillion of assets under management, aims to surpass its success in Japan where it grew client assets from $2 billion to more than $15 billion in just a few years, Bill Huffman told The National in an interview in Abu Dhabi.

“We think we can do the same thing here,” Mr Huffman, who took the helm at Nuveen seven months ago, said. “We are managing $3 billion today in the region across asset classes … but could we be easily managing $15 billion, $20 billion, $30 billion [in five years]? I think that would be easy. That's not out of the question, that's achievable.”

The Middle East, especially oil-rich GCC economic bloc, has all the ingredients for rapid growth and Nuveen could manage “maybe even more” in assets than it anticipates, with the region's affluent investor base and economic momentum providing tail winds.

“When you think about the Middle East … you've got family offices, you've got a wealth market, you've got sovereign funds, and it fits into who we are and how we've tried to distribute [our business] across the globe,” Mr Huffman said.

Nuveen opened its first Middle East office at Abu Dhabi's ADGM – one of the region's fastest-growing onshore financial hubs – at the end of the third quarter this year. The 125-year-old company, which manages $412 billion in equities and $447 billion through its fixed income portfolio, plans to gradually expand its client base across regional markets.

Mr Huffman is not worried about growing competition in the Middle East’s asset management space and said it stands out in terms of the breadth of products it can offer. “We manage our own money and we're one of the largest general accounts in the world,” he said. “We're going to be investing our own money alongside someone else and a lot of people [in this market] can't say that.”

The Middle East is home to some of the top sovereign wealth funds in the world and there is a significant scope for global investment managers to win third-party asset management mandates those from sate investment arms.

“We've had meetings in the region, with sovereign [clients] on partnerships … I think that they are interested,” Mr Huffman said.

The option of co-investments through partnerships with state investment arms is also on the table for Nuveen, which has “done that in other locations” in the world, he added.

Nuveen is a wholly owned subsidiary of US teachers' pension fund TIAA. In the wider Europe, Middle East and Africa region, the company has an institutional client base of about 400 including pension funds, insurance companies, sovereign wealth funds and financial institutions, as well as family offices. In the past 15 years, it has grown from a being $100 billion level company to a $1.3 trillion asset manager with clients around the world.

“As we increased our asset classes, we were also increasing the globalisation of the business … [and] we thought here in the region, in Abu Dhabi and the UAE, there was a real opportunity [to grow],” Mr Huffman said.

Nuveen is the second trillion-dollar asset manager to establish a presence in the UAE capital this year after PGIM, the global asset management business of Prudential Financial, which has $1.33 trillion in assets under management. PGIM opened its office in ADGM in September.

Both asset managers join BlackRock, the world's biggest asset manager, in a rapidly growing line-up of financial institutions, family offices, international funds and investors that call ADGM home.

The number of asset and fund managers operating within the jurisdiction reached 128 by the end of the third quarter, managing 156 funds. The assets under management of companies operating in the financial hub have tripled, with a 215 per cent annual increase in the three-month period, according to the latest ADGM data.

Eight global institutions, with $635 billion in aggregate assets, announced they were setting up a base in the UAE capital during Abu Dhabi Finance Week, which concluded on December 12.

Wealth and asset managers are flocking to the UAE to capitalise on the rising population of affluent investors in the region. This month, Swiss bank UBS said the broader Mena region has attracted the most billionaire wealth globally since Covid-19 as the uber-rich move to countries that offer premium health care, education, safety and ease of doing business.

The aggregate wealth of UAE billionaires alone rose by 39.5 per cent annually to $138.7 billion this year, with the number of billionaires growing by one to 18, UBS’s Billionaire Ambitions report found.

Growth for Nuveen in the region has previously been relatively slow as the company was focused on global expansion and did not want to rush into the Middle East. However, as the business grows, Nuveen plans to increase the headcount and is keen to set up an office in Saudi Arabia, Mr Huffman said.

There is appetite from investors to diversify across asset classes, and this bodes well for Nuveen's growth prospects. “A lot of conversations have been around credit, private credit, public credit, energy and infrastructure credit, which we can do,” he said.

There is also interest in public security investments, alternative investments and in “risk-centric” assets to get higher returns.

Nuveen is one of the largest private credit firms in the world and among the top five real estate managers globally, Mr Huffman said. “We can provide all of that … we can bring a lot of different capabilities” to investors in this part of the world, he added.