(Bloomberg News) TIAA-CREF, the New York-based firm that oversees more than $400 billion in pensions for teachers and academic researchers, said it will invest $1 billion in a new group that will manage money for nonprofits.
Covariance Capital Management, based in Houston, will provide services to nonprofits with assets under management of $100 million or more, TIAA-CREF said in a statement today. Covariance will invest client money in stocks and bonds, as well as private equity, real estate and hedge funds, the firm said.
Scott Wise, the former chief investment officer of Rice University in Houston, joined Covariance last year as TIAA-CREF expanded into investment management for nonprofits, following similar moves by New York-based Goldman Sachs Group Inc. and Pacific Investment Management Co. in Newport Beach, California. The companies are courting endowments and foundations as they assess their investments following record losses in the aftermath of the financial crisis.
Covariance, which will start investing capital in the third quarter, also hired executives including Michael Jawor, previously the chief investment officer at Man Group's Glenwood Capital Investment Group LLC hedge fund and Daniel Feder, a former manager at Sequoia Capital in Menlo Park, Calif., and Princeton University's endowment.