(Dow Jones) TIAA-CREF's new investment-management business for endowments and foundations will employ about 20 endowment officers and target institutions with $100 million and up, said Scott Wise, who will serve as the business's chief investment officer.

Wise, 60, will assume his new job June 21. He is now president of Rice Management Co., which manages Houston-based Rice University's endowment.

TIAA-CREF is counting on a strong track record in risk management and its access to good managers to help make the new line of business attractive, Wise said in an interview Wednesday. He said using an outside source like TIAA-CREF will help provide stability for foundations and endowments, which often have trouble keeping experienced professionals, especially those experienced in alternative assets such as hedge funds and private investments.

The new business will be in Houston and separate from TIAA-CREF's retirement business. It is expected to be up and running toward the end of this year, although Wise said he's not sure at what pace he'll build up his staff, he said.

The business will be designed to bring to smaller charitable institutions the same kind of investment experience and multistrategy asset-allocation approach, including traditional and alternative asset classes, that larger endowments and foundations have been using for years, Wise said.

TIAA-CREF, the Teachers Insurance & Annuity Association-College Retirement Equities Fund, manages more than $425 billion on behalf of institutional clients and individual participants in the academic, research, medical and cultural fields.

Wise said that the conventional target market for outsourced endowment management is between $100 million and $1 billion, but that's changing. "There will be some situations where endowments and foundations larger than that will want to at least take a look at outsourcing to a strong provider," he said.

Some endowments have very small internal staffs, and some don't even employ chief investment officers, but may be run by their chief financial officer with the help of an investment committee, he said.

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