Clients Continue Exodus as Nuveen Investments Seeks Another Billion Dollar Refinancing, Teamsters Say

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International Brotherhood of Teamsters

Feb 22, 2012, 12:38 ET

WASHINGTON, Feb. 22, 2012 /PRNewswire-USNewswire/ -- As Nuveen Investments seeks to refinance $1.1 billion in debt – just barely a year after the firm's last billion dollar refinancing – the International Brotherhood of Teamsters is urging clients carefully to consider the firms suitability as an asset manager in light of its highly leveraged financial condition, as well as its oversight and control by private equity owners Madison Dearborn Partners. Some Teamster-affiliated funds have already moved investments away from Nuveen; others are reviewing their options.

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"We are concerned that Nuveen is trapped in a debt service cycle that the company cannot escape," said C. Thomas Keegel, General Secretary Treasurer of the Teamsters union whose affiliated pension and benefit funds have more than $100 billion in assets under management including some with Nuveen subsidiaries. "As part of the leveraged buyout led by Madison Dearborn Partners in 2007, Nuveen borrowed more than $3.1 billion at high interest rates. They have since refinanced that debt several times at even higher rates. We believe that kicking the can down the road will ultimately result in significantly higher fees for clients."

Nuveen has reported losses nearly every quarter for the past three years. Their strategy of acquiring other asset management firms to restore revenues back to pre-melt down levels has yet to benefit Nuveen's bottom line.

"We expect financial managers of our members' retirement assets to be practical, responsible fiduciaries that use good judgment," said Teamsters International Vice President Rome Aloise, Co-Chair of the Investment Committee for the Western Conference of Teamsters Pension Trust which, together with other union funds has withdrawn hundreds of millions of dollars from being invested in Nuveen or Nuveen-owned companies. "How can a company that can't manage its own finances be trusted to invest wisely for its clients?"

Nuveen's financial circumstances are no secret. Both Standard & Poor's and Moody's Investment Service currently rate Nuveen Investments just one level above "junk" status on their respective ratings scales.

Nuveen's subsidiaries include: Nuveen Asset Management; Nuveen Hyde Park; NWQ Investment Management; Santa Barbara Asset Management; Symphony Asset Management; Tradewinds Global Investors; Winslow Capital Management, FAF Advisors, and Gresham Investment Management, LLC.

Founded in 1903, the Teamsters Union represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico. Visit www.teamster.org for more information. Follow us on Twitter @TeamsterPower.

SOURCE International Brotherhood of Teamsters