The acquisition will expand Nuveen’s private capital expertise and presence into Europe, complementing its North American private debt and private equity offering.

Nuveen, the investment manager of TIAA, announced on Friday that it has entered into an agreement to acquire a controlling interest in Arcmont Asset Management, a European private debt investment manager with $21 billion in committed capital. 

The acquisition will expand Nuveen’s private capital expertise and presence into Europe, complementing its North American private debt and private equity investment specialist Churchill Asset Management, the firm said in a statement.

Since its inception, Arcmont has raised more than $26 billion of capital from more than 350 blue-chip investors and has committed over $20 billion to 270 transactions across Europe. 

The transaction, whose financial terms were not disclosed, is expected to close in the first half of 2023, subject to Financial Conduct Authority and other regulatory approval.

The firm said that the combined capabilities of Arcmont and Churchill will create one of the world’s largest private debt managers, with more than $60 billion in combined committed capital, bringing Nuveen’s firmwide alternative credit assets under management to $178 billion. 

Coming together to form Nuveen Private Capital, a new entity, Arcmont and Churchill will work together in partnership, giving both firms geographic scale and the ability to offer a broader range of products and financing options to corporate borrowers. 

Both firms will continue to be managed by their own respective leadership teams, but will benefit from the resources, expertise and distribution capabilities of Nuveen. With more than 240 investment and support professionals, Arcmont and Churchill serve a combined investor base of approximately 600 institutional and family office investors.

“Scale is a significant differentiator in private capital fundraising and deployment, so our complementary capabilities will greatly benefit from a more diversified set of limited partners, enhancing our ability to raise capital – and also accelerating our growth across the entire private debt market,” Jose Minaya, Nuveen CEO, said.

Ken Kencel, president and CEO of Churchill, added: “Together our two firms can provide our private equity clients with scaled and integrated financing solutions and our investors with access to a broader array of attractive investment opportunities from a best-in-class global private capital platform.” 

“Drawing on the strengths of the enlarged group, we expect to extend our market position in our core business of upper middle market lending in Europe,” Anthony Fobel, Arcmont CEO, continued.

Kencel and Fobel will be co-CEOs of Nuveen Private Capital reporting to William Huffman, head of Nuveen equity and fixed income, which includes global equities, taxable fixed income, municipals, multi-asset and private capital, the firm said. Huffman will also serve as chairman of Nuveen Private Capital. Both Arcmont and Churchill will continue to operate under their respective names and brands, with no change to their respective investment teams or processes.

Nuveen highlighted the rapid growth in the private debt market, reaching a record $1.4 trillion in AUM globally in 2022, saying that it has continually responded to the demand by adding to its debt-focused products and investments to provide enhanced capabilities for its clients. 

The growing importance of alternative credit in institutional portfolios is also evident in Nuveen’s 2022 global equilibrium survey of 800 institutional investors and consultants, which revealed that three-quarters of investors are planning to expand their reach for yield over the next two years and the vast majority are looking to alternative credit.

The definitive agreement for Nuveen to acquire a controlling interest in Arcmont Asset Management includes the minority stake held by Dyal Capital Partners IV.