Nuveen hires CPPIB, Guggenheim execs – Exclusive

The new recruits will lead the US Cities Office Fund and US Cities Industrial Fund, which will launch in late 2019.

Nuveen Real Estate has hired former Guggenheim Real Estate portfolio manager Chad Phillips and former Canadian Pension Plan Investment Board portfolio manager Brian Tilton to oversee the firm’s next series of open-ended sector-specific real estate funds.

Phillips will lead the US Cities Office Fund and Tilton will oversee the US Cities Industrial Fund. The core vehicles round out the sector-specific open-ended US Cities fund series and will launch during the second quarter, according to Michael Hunter, senior director of the product development team. Both offerings will be seeded with portfolios funded by co-investments.

Nuveen parent company TIAA has agreed to commit a $100 million co-investment to each of the two funds, Hunter said. The new vehicles will use NCREIF’s open-ended diversified core equity sub-index funds – which focus on specific property types – as a benchmark for investment returns.

Phillips joins Nuveen after spending 14 years at Guggenheim Real Estate, which has a 2012-vintage open-ended core ODCE fund. At Guggenheim, he oversaw strategies, acquisitions, financings and dispositions as a portfolio manager. Tilton, who previously led the US industrial real estate team at CPPIB, will continue to focus on the same property type in his new role. Both Phillips and Tilton will report to Rahul Idnani, Nuveen Real Estate’s global chief operating officer and US head of portfolio management.

The two hires follow the appointment of managing director Nikita Rao, who joined in August 2018 to lead the multifamily sector strategy. She currently acts as the portfolio manager of Nuveen Real Estate’s open-ended US Cities Multifamily Fund, which launched in February with a $850 million seed portfolio and is also part of the US Cities fund series.

The launch of these sector-specific funds is a response to investors’ need for customization, since they can tailor their portfolio exposures to the four main property types of multifamily, retail, office and industrial, according to Hunter. Investors want to be more active in the weighting of property types rather than giving up control to a diversified fund, he explained. Though diversified ODCE funds have long reigned in the core funds space, Hunter believes asset managers need to offer a more specialized core real estate investment product.

The four US Cities funds will invest in 35 cities that Nuveen’s research team has identified as being poised for growth.

In addition to the US Cities fund series, Nuveen Real Estate also offers two diversified core open-ended real estate funds focused by geography. The European Cities Fund invests in diversified core real estate throughout Europe, while the Asia-Pacific Cities Fund invests in diversified core properties in Asia. The six open-ended core investment vehicles are all part of Nuveen Real Estate’s greater Global Resilient Series.