TIAA-CREF Seeds Subsidiary Covariance With $1B

Mar 29 2011 | 9:47am ET

TIAA-CREF, a financial services and retirement planning specialist for the nonprofit sector, has provided $1 billion in seed capital to its newly launched endowment management subsdiary, Covariance Capital Management.

The seed capital is to be managed as a diversified investment portfolio. Covariance will begin investing capital in the third quarter of this year.

Covariance will be based in Houston, Texas and led by Scott Wise as president and CIO. The firm will operate independently as a wholly owned subsidiary of TIAA, providing outsourced CIO services to non-profits with AUM of $100 million or more.

Covariance will offer clients access to experienced third-party investment managers in traditional as well as alternative asset classes such as private equity, real estate, commodities and hedge funds. The firm says 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,” said Roger Ferguson, Jr., 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.”
In addition to Wise, the Covariance executive team will include Deputy CIO Michael Jawor, former CIO of Glenwood Capital Investments, a $5 billion fund of hedge fund subsidiary of Man Group.

Covariance has also tapped Daniel Feder as senior investment manager (private equity and venture capital). Feder comes to his new post from the investment office for Princeton University’s endowment.

Ansel Mullins, formerly managing director and partner at credit hedge fund Wave Management, joins as senior investment manager (public markets and hedge funds) while Holly Hardy, formerly with Rice University’s endowment, becomes senior investment manager (real assets.)

Covariance COO Andrea Reed joins served previously as a partner at Perella Weinberg Partners and risk manager for the Perella Agility Funds.

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.

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