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TIAA CREF expands endowment management business launching Covariance Capital Management

Tuesday, March 29, 2011

Roger W. Ferguson
Opalesque Industry Update - TIAA-CREF, the leading provider of financial services and retirement planning for the nonprofit sector, announced today the expansion of its endowment management business with the launch of Covariance Capital Management (Covariance). The company also announced it is providing Covariance with $1 billion in seed capital to be managed as a diversified investment portfolio. In addition, Covariance has named key executives to its senior team.

Led by Scott W. Wise and based in Houston, Texas, Covariance will operate independently as a wholly-owned subsidiary of TIAA, providing outsourced Chief Investment Officer (CIO) services to nonprofits with assets under management of $100 million or greater. Covariance will offer clients access to highly experienced third-party investment managers in traditional as well as alternative asset classes such as private equity, real estate, commodities and hedge funds. Also, its open-architecture approach will provide customized investment solutions that can meet the unique liquidity and risk/return profiles of nonprofit institutions.

“This is part of our mission to aid and strengthen the nonprofit sector. Our clients have told us they are looking for a reliable and objective endowment management partner and we are proud to officially launch this business with a significant investment,” said Roger W. Ferguson, Jr., President and CEO of TIAA-CREF. “Under the leadership of Scott and his experienced investment team, Covariance is uniquely positioned to manage multi-asset class portfolios and help institutions meet their goals.”

“This is a very strong team,” said Scott W. Wise, President and Chief Investment Officer of Covariance. “We have strategically recruited a team that brings together expertise from both the nonprofit sector, as well as investment professionals who focused on asset management for external clients. With this solid foundation, we look forward to working with clients to develop tailored endowment management programs that appropriately address return, risk and liquidity objectives.”

As a part of building a best-in-class investment management team, Covariance introduced the following senior investment professionals:

Michael J. Jawor, CFA, joins as Deputy Chief Investment Officer. Mr. Jawor was previously Chief Investment Officer at Glenwood Capital Investments, a $5 billion AUM fund of hedge fund subsidiary of Man Group. Prior to that, Mr. Jawor was co-portfolio manager of Sirius Partners, a fund of hedge funds. Mr. Jawor joined Sirius Partners after a thirteen-year career at the First National Bank of Chicago.

Daniel E. Feder, CFA, joins as Senior Investment Manager – Private Equity and Venture Capital. Mr. Feder was previously Managing Director of Private Markets at Sequoia Capital Heritage Fund. From 2000 to 2008, Mr. Feder was the Managing Director of private equity and venture capital with the investment office for Princeton University’s endowment. Mr. Feder also led a wide range of private markets investments at CIGNA Investment Management and CalPERS.

Ansel C. Mullins joins as Senior Investment Manager – Public Markets and Hedge Funds. Mr. Mullins previously served as Managing Director and Partner at the credit hedge fund Wave Management. Prior to this, Mr. Mullins was a Managing Director at Investcorp, an alternatives firm with lines of business in private equity, real estate and hedge funds.

Holly A. Hardy joins as Senior Investment Manager – Real Assets. Ms. Hardy has eighteen years of experience with Rice University’s endowment fund managing its energy and real estate investments. Prior to this role, Ms. Hardy worked for five years as a trust officer at Texas Commerce Bank overseeing oil and gas assets and seven years as a landman with TXO Production Corp.

Andrea V. Reed joins as Chief Operating Officer. Ms. Reed previously served as a Partner at Perella Weinberg Partners and Risk Manager for the Perella Agility Funds. Prior to this, Ms. Reed worked as the Risk Manager for the University of Texas endowment funds (UTIMCO) and served as the Portfolio Risk Manager for Rice University.

Covariance has also recently added the following senior members to the team:

Shannon H. Morton, CFA, joins as Managing Director - Marketing and Investor Relations. Most recently, Mrs. Morton was Vice President and Senior Portfolio Manager for AllianceBernstein Investments. Prior to that, Mrs. Morton was a Partner and Senior Client Portfolio Manager for AIM Private Asset Management and AIM Investments.

Sheel J. Patel, CPA, joins as Chief Financial Officer. Ms. Patel was previously the CFO for Simmons and Company International, an independent investment bank specializing in the energy industry. Prior to that, Ms. Patel worked at PricewaterhouseCoopers, LLP for more than ten years within the Assurance practice.

TIAA-CREF is one of the world’s largest institutional asset managers and Covariance expands the company’s existing endowment management capabilities. TIAA-CREF also provides endowment services through Kaspick & Company, a boutique investment management firm, specializing in the management of planned gift assets and mid-size endowments and TIAA-CREF Trust Company FSB, which provides institutional and private asset management services for small endowments.

Covariance will begin investing capital in the third quarter of this year.

(press release)

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