In 2008, Nuveen Investments wrestled with the freeze-up of the auction-rate preferred securities market and sought to restore liquidity at par to preferred shareholders and to reduce the expected cost of leverage over time for common shareholders.
As of October, Nuveen says, it had refinanced $2.7 billion in ARPS issued by taxable closed-end funds using a variety of conventional debt-financing alternatives and proceeds generated from fund portfolio transactions. Also, Nuveen’s leveraged municipal closed-end funds refinanced $1.5 billion in ARPS issued by tax-exempt funds using tender-option bonds and variable rate demand preferred securities, a new form of preferred shares.
“Overall, Nuveen Investments got a lot of positive momentum from how we handled everything, and our advisor partners were proud of how we handled this,” explains Alan Brown, executive vice president and co-head of Nuveen Investments Global Private-Client Group. “So overall, it had little impact on sales flows. We are one of a few firms to see positive flows [in 2008] in fixed-income and equity.”
The company addresses the general anxiety in the marketplace by working with advisors to help them build solid, well-diversified portfolios for clients. “People went to short-duration bonds or limited-term municipal bonds,” Brown says.
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“And people look to us, as we’ve been around 100 years, and our brand for certain attributes, namely conservatism, trust and integrity.”
The firm has 70 funds in total, of which 30 focus on fixed-income.
“The severity, depth and breadth of the current crisis affect everyone,” he explains. “We are very committed to our customers going forward. We have hunkered down to follow our strategy.”