||The neutrality of this article is disputed. (March 2012)|
Nuveen Investments is a Chicago based private company in the asset management industry. Nuveen was founded in Chicago, Illinois in 1898 and was previously named The John Nuveen Co., after founder John Nuveen.
Nuveen started in the municipal bond underwriting business and remains active in municipal bond market. Nuveen sells services including separately managed accounts, retail mutual funds and closed-end funds. Nuveen Investments has $220.1 billion in assets under management.
Founded in 1898, Nuveen Investments began as John Nuveen & Company, when founder John Nuveen, Sr. created the firm as an investment banking company specializing in the underwriting and distribution of municipal bonds. John Nuveen formed the company in 1898. The first bond it underwrote was for a Minnesota water company. After World War II, John Nuveen, Jr. helped with the Marshall Plan administration.
In 1969, it was purchased by Investors Diversified Services (IDS). In 1974, the company was sold to The St. Paul Companies. It was privatised in 2007 after being acquired by Private Equity Group led by Madison Dearborn Partners for $5.4 Billion.
The company is also known for a commercial it aired in 2000 during the Super Bowl which, through the aid of computer animation, featured Christopher Reeve "walking" along with several other sufferers of spinal paralysis.
Auction rate securities
Nuveen came under criticism during 2008 for its involvement in the auction rate securities auction failures, during which investors' assets of $15 Billion became illiquid. They operated closed-end funds that sell two share classes in order to acquire capital for investment: auction-rate preferred shares that hold first claim on the underlying assets (and pay income at rates set in weekly auctions), and common shares that typically pay higher income in exchange for greater risk of loss of principal.
The source of troubles for Nuveen and its investors was the collapse of the market for auction rate securities in February 2008, when broker-dealers such as UBS declined to continue to participate in dutch auctions that determined the rate of interest for the securities. Common shareholders were hurt, due to a decline in net interest income and the increased discounting of their shares in the market following fears that Nuveen would be unable to refinance or reauction the preferred shares at lower interest rates. While common shareholders suffered worse than preferred shareholders in terms of principal losses, they were able to sell their shares on the NYSE while preferred shareholders had no market in which to sell.
On September 19, 2008, Nuveen Executive VP William Adams IV was asked to testify in front of the House Finance Committee, where he stated that "One hundred of our closed-end funds had more than $15 billion of auction rate preferred shares - or ARPS - at the time this market failed in February." Adams said that Nuveen had come up with a new financial instrument called Variable Rate Demand Preferred, or VRDP. He urged that further approval of this new type of stock would allow Nuveen to pay back investors who had lost access to their money invested in Nuveen's preferred shares.
- Nuveen Fined $3 Million Over Marketing of Preferred Shares, Bloomberg News, May 23, 2011
- AUCTION RATE SECURITIES MARKET: A REVIEW OF PROBLEMS AND POTENTIAL RESOLUTIONS, Committee on Financial Services hearing, September 18, 2008
- Forbes: Nuveen Agrees To $5.4B Buyout
- New York Times: As Good as Cash, Until It's Not
- Auction-rate securities a struggle for Nuveen Firm works to liquefy $15 billion worth of shares issued to boost fund yields
-  Testimony of William Adams IV, Executive Vice President, Nuveen Investments, Inc. Before the Committee on Financial Services, U.S. House of Representatives