Nuveen Expanding Impact Investing Initiatives
The Impact Investing community is buzzing over Nuveen’s continued build out of its impact investing focus. Rekha Unnithan, who joined the firm in 2012 with the intention of investing in solving societal issues, says “Impact investing is now all of a sudden having its moment…It’s cool now and is getting a lot more attention. We must be very mindful though that this is done correctly to actually have impact as opposed to just moving capital around and calling it impact.” Unnithan cautions against over-investing and losing sight of the main goal — that is to have societal impact.
Nuveen is stepping up its focus on issues such as income inequality, access to health care, climate change, and affordable housing. The purpose of this kind of impact fund is to achieve specific goals such as making housing in a neighborhood cheaper or avoiding the detrimental effects of gentrification. Socially conscious investment practices have spiked in recent years, with firms such as KKR and Allianz Global Investors now having their own impact funds.
As a whole, impact funds managed only $8 billion in 2012 and over $700 billion as of 2020. According to the International Finance Corporation, over $10 billion worth of assets have the potential to be involved in impact funds. Unnithan claims that $20 million to up to $60 million is dedicated to impact investments for Nuveen. Some funds that Nuveen has invested in include View Inc. and Mumbai-based Aavishkaar Group. Additionally, Nuveen plans to invest $30 million in a housing affordability project for seniors in Brooklyn.
One major criticism of impact investing is whether there will be a monetary benefit and how much there will be for the firm. This should not be a problem for firms that are truly successful in impact investing. As ESG funds dissipate, impact investing will become more of a norm and expectation. Essentially, impact investing will become more mainstream and common investment practices.
CEO of Schroders Plc Peter Harrison stated “ESG won’t exist in five years time — it’ll be what people are expected to do.” Instead the “puck is going” towards impact, he said, with investors asking what’s the effect of what they’re doing, are they making a positive contribution to the world, and how can they measure it. For firms that successfully offer impact investing, “it becomes genuinely differentiating.” Impact investing should not be a problem, however. Impact investing should steadily grow and solve issues. It should also provide a more diverse range of investment opportunities.
Nuveen is an asset management firm owned by The Teachers Insurance and Annuity Association of America. The firm has five decades of experience in impact investing since its inception about 120 years ago. As of 2017, the firm has $970 billion assets under management.
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