TIAA-CREF loses alternatives chief

TIAA-CREF has merged its formerly distinct alternative investment programme into two other divisions, and the programme’s founder and former chief Sheryl Schwartz is no longer with the company.

The Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF) “remains committed to private equity”, a spokesperson said. “We plan to make new fund [commitments] and co-investments going forward,” the spokesperson said.

The alternatives programme has been “integrated” with the portfolio management and private placement divisions. The combined division will be led by Heather Davis, who heads portfolio management, and Marina Mavrakis, who leads the private placement unit.

Sheryl Schwartz

The business combination was done “to create more integrated and resourced teams able to focus on the entire range of investment opportunities in their respective categories”, TIAA-CREF’s spokesperson said.

The company has net asset value in its private equity and co-investment portfolios of about $5.5 billion. TIAA-CREF has about $3 billion in unfunded commitments.

Schwartz started the alternative investment programme at TIAA-CREF in 1997. She told PEI in an interview in 2008 her job “is the most time-consuming, intensive job – even if you don’t commit to a single fund. And it doesn’t matter how many people you have on your team … it’s just incredibly time-consuming.”

The decision to start the alternatives programme at TIAA-CREF was “initially just an experiment”, Schwartz told PEI at the time. When she launched the alternatives platform, she had been working in the company’s asset-backed securities division. For several years, Schwartz worked in various investment divisions including mortgage-backed securities, private placements and secondary private placements.

Schwartz and five others all “essentially” volunteered to launch the alternatives programme.

“The key, we realised, was access to the best funds,” she said. “But with private equity funds, the best deals don’t have a placement agent. You have to find them, identify them, and go out and network with them.

“We needed a dedicated effort and a dedicated team. And we couldn’t just respond to opportunities, we had to have a strategy and a plan and proactive marketing,” she said. “So we formed the team. I became the head of it and we started investing.”