TIAA-CREF Asset Management by oas1s


									                    TIAA-CREF Asset Management
S ecti on

             In January, Geoffrey Dohrmann,
             publisher and editor-in-chief of                     TIAA-CREF COMBINES BREADTH AND DEPTH OF EXPERIENCE
             The Institutional Real Estate Letter,                              IN ALL FOUR QUADRANTS
             spoke with Thomas Garbutt and
             David Brown, managing direc-                            PRIVATE                                    PUBLIC
             tors of TIAA-CREF. The following is
             an excerpt of their conversation.
Spons ored

                                                      EQUITY         $23 Billion                                $1 Billion
                                                                     Real Property ($21 Billion)                Real Estate Securities
             Dohrmann: How did TIAA-CREF                             Real Estate Fund Investments
             get started?                                            ($2 Billion)
             Brown: Back in 1918, Teachers
             Insurance Annuity Association was
             formed by the Carnegie Founda-           DEBT           $20 Billion                                $25 Billion
             tion with an endowment of $1                            Private Commercial Mortgages               Commercial Mortgage–Backed
             million from the Carnegie Corp.                                                                    Securities and REIT Debt
             of New York. At the time, the mis-
             sion was to provide life insurance
             and retirement plan investing for       TIAA-CREF real estate assets under management as of Sept. 30, 2007.
             professors and employees of col-        ments such as agriculture, timber,                   finance, lease finance and private
             leges and universities.                 oil and gas, infrastructure projects,                equity. It also includes alternative-
             Garbutt: In 1952, TIAA launched         and the like. We’re involved to                      type equity in sectors like agricul-
             the College Retirement Equities         some degree in all of it.                            ture, timber, oil and gas, as well as
             Fund or CREF, a variable annu-          Dohr mann: Who ar e your                             some private emerging market and
             ity account that invests in com-        investors?                                           high-yield investing.
             mon stocks. This was a method                                                                Dohrmann: What types of prod-
             of managing retirement savings          Garbutt: While we are best
                                                     known for serving the higher edu-                    ucts do you offer?
             and income that was unusual and
             innovative at the time but has          cation market, we now offer our                      Garbutt: The equity real estate
             become common among progres-            asset management expertise to a                      group currently offers separate
             sive retirement systems.                wide range of investors includ-                      accounts as well as other invest-
             Dohrmann: How long has TIAA-            ing institutional investors, financial               ment vehicles to institutional, inter-
             CREF been investing in real estate?     advisors and other intermediaries.                   mediary and individual investors.
             Brown: We’ve been investing in          Dohrmann: What is the TIAA-                          Dohrmann: What does the Global
             commercial mortgages and real           CREF Global Real Estate platform?                    Private Markets group offer?
             estate for decades, starting in the     Garbutt: TIAA-CREF’s global                          Brown: We are capable of the
             1930s, and we were responsi-            real estate platform manages $69                     whole spectrum of financial
             ble for one of the first regional       billion in assets across the four                    investing. Our private finance and
             mall concepts back in the 1950s.        quadrants. Our platform leverages                    commercial mortgages are the
             Today, we’re a major player in          the combined experience of our                       critical components of what we
             all the major property types —          dedicated teams and its compre-                      do in the global private market
             office, retail, hotels, multifam-       hensive infrastructure to provide                    space. The private finance port-
             ily and industrial, as well as the      a strategic foundation and tactical                  folio stands at $16 billion, while
             four quadrants.                         guide to portfolio construction and                  the commercial mortgage portfolio
             Dohrmann: How would you                 management. I am responsible                         totals more than $20 billion.
             describe TIAA-CREF today?               for the private equity portion of                    Dohrmann: What defines your
             Brown: We are a global asset            the Global Real Estate platform.                     investment strategy and approach?
             management organization, which          As head of TIAA-CREF Global                          Garbutt: We have a very strong
             moves nimbly across sectors to          Real Estate my mandate is to build                   commitment to the top-down/bot-
             find the best opportunity that pro-     a world-class direct real estate                     tom-up approach. I know you
             vides relative value for our clients.   investment management group.                         hear that a lot, but I think what
             That could be within corporate,         Brown: As head of TIAA-CREF                          we do is a bit different than oth-
             public or private investments such      Global Private Markets, I’m respon-                  ers in that we apply the same
             as equities, fixed income, real         sible for all of our global private                  consistent approach to all of our
             estate equity, commercial mort-         investment activity, which includes                  portfolios irrespective of style. Our
             gages or structured products. It        commercial mortgages, private                        investment strategy is research-
             could also be alternative invest-       placements or financings, project                    driven, and we have a very robust
dedicated research group that uses       experienced manager through               a chance to provide liquidity to
proprietary models to supply great       thick and thin in many different          the marketplace, and the transac-
insights on where to navigate            aspects of the marketplace.               tions we’ve done in the second

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both inside and outside the U.S.         Dohrmann: With the upheaval               half of the year have significantly
We couple that with our extensive        in the debt markets and repric-           wider spreads with typically con-
on-the-ground staff throughout the       ing of assets, is this the right time     servative loan-to-values and very
U.S. — and soon the European —           to be putting more capital into           favorable terms.
markets to put together a series of      real estate?                              Dohrmann: How do you see the
well-constructed portfolios. This
                                         Brown: It is if you can find the          Global Real Estate group evolving?
consistent approach has resulted
                                         best relative values, which we
in some very strong results for                                                    Garbutt: Since we’ve opened
                                         try to do. We’re major players
our clients.                                                                       our doors as a third-party money
                                         across the board, so we’re able to

                                                                                                                          Spons ored
Dohrmann: What competitive                                                         manager about three years ago,
                                         see opportunities wherever they
advantages do you bring to the                                                     we have won multiple separate
                                         occur. So we are actively investing
table?                                                                             account mandates and launched
                                         in the market, but we’re investing
                                                                                   closed- and open-end funds.
Garbutt: One of our biggest com-         prudently and very selectively.
                                                                                   We’ve been a big investor in the
petitive advantages is the sheer         Dohrmann: Where do you see                European and Canadian markets
size of our operation. We manage         the opportunities today?                  for the past 15 years and are look-
about $25 billion of direct real
                                         Brown: We’re trying to find               ing to expand our global oper-
estate in the U.S., Canada and
                                         areas and opportunities in the            ations and gain a better global
Europe, and we’re in the fore-
                                         marketplace where we can                  footprint. During the next five to
front of all activity in the mar-
                                         bring our expertise, our invest-          10 years, we expect to expand
ketplace, whether it’s on market
                                         ing knowledge and our liquidity           the products we already have by
or off market. We see more than
                                         to bear — and get paid for it.            broadening our offerings along
3,000 investment opportunities a
                                         The tightening of the credit mar-         the risk spectrum as well as geo-
year. And the reason we do is
                                         kets has given portfolio lenders          graphic focus. v
because of the size of our plat-
form and our ability to deliver.
So whether a mandate is large                                            INTERVIEWEES
or small or core or value-added,
                                                            Thomas Garbutt, managing director, is head of the
what really benefits these man-
                                                            TIAA-CREF Global Real Estate group, which includes
dates is the fact that our platform
                                                            worldwide acquisitions, sales, portfolio and asset man-
has access to all of these prod-
                                                            agement, and business and product development. He
ucts. We try to find the best rela-
                                                            has 27 years of experience in the real estate finance and
tive value for our investors.
                                                            investment industries.
Dohrmann: How quickly can
you place capital?                                          David Brown, managing director, is head of the TIAA-
Garbutt: We place capital very                              CREF Global Private Markets group. Brown is responsible
quickly. Our platform is disci-                             for overseeing the private fixed-income portfolio includ-
plined, but it is also very nimble                          ing commercial mortgages, which totals more than $40
and responsive to the market. We                            billion. He has 25 years of experience in the real estate
buy $5 billion to $7 billion worth                          finance and asset management industries.
of high-quality real estate a year. In
addition, we sell $2 billion worth                                       CORPORATE OVERVIEW
of assets. We’ve grown our portfo-         TIAA-CREF is one of the largest institutional real estate investors in the
lio from about $5 billion to about         nation, with a $69 billion global portfolio of direct and indirect invest-
$25 billion. To achieve this type of       ments as of Sept. 30, 2007. Best known as a national financial services
volume year after year, you need           organization and provider retirement services to the academic, research,
to be quick and responsive.                medical and cultural fields, TIAA-CREF has more than $437 billion in
Dohrmann: What type of expe-               combined assets under management (9/30/07). Through TIAA-CREF Asset
rience does TIAA-CREF have                 Management, institutional investors, financial advisers and other interme-
through the various market cycles?         diaries worldwide can access the extensive investment, research and ana-
                                           lytical capabilities of the TIAA-CREF organization including the 60 years of
Garbutt: One of the strengths we           real estate investment experience of the Global Real Estate group.
bring to the table is our depth of
experience. We bought our first                                        CORPORATE CONTACT
equity property 60 years ago. I’m                                TIAA-CREF Asset Management
not sure how many people in                                            Kevin Maxwell, CFA
this space can make that claim.                                  Managing Director, Real Estate Sales
In addition, we have one of the                                 730 Third Ave • New York, NY 10017
deepest senior teams in the indus-              Tel: (212) 916-4812 • Fax: (212) 916-5553 •
try in terms of duration in the                                 
business. We are an extremely

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