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New TIAA-CREF institutional arm to eye Europe

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EUROPE – The new institutional asset management arm of US education retirement system TIAA-CREF will have a presence in Europe before too long, says one of its top executives.

“I think we’re over there well within five years,” Jeffrey Margolis, TIAA-CREF Asset Management’s director of institutional sales and marketing, said in an interview. He expected European institutions such as pension funds would be attracted to its US real estate expertise “immediately”.

The 307-billion dollar Teachers Insurance and Annuity Association - College Retirement Equities Fund set up the new unit, known as TCAM, this month. The move followed studies instituted by chairman Herb Allison in 2003, Margolis explained. “Institutional asset management kind of bubbled to the top.”

Margolis, 47, joined TCAM from Morgan Stanley Investment Management, where he was head of global institutional business. TCAM is headed by former TIAA Investments’ head Nancy Heller.

Margolis said that over time, the aim is to create a “full-blown traditional asset management shop”. He cited the system’s strength in real estate – it is the largest real estate investor in the US. It will focus across various asset classes, including private equity and hedge funds in time.

He declined to say what targets the new business has for growing assets, but said he would like to think the unit would gain clients this year.

“We have a 10-year plan,” he added. “There is a recognition in the firm that this is a long-build business.” He said the scheme’s existing asset managers would manage client assets.

Margolis said the new unit had not yet been in contact with consultants, saying: “It’s a little bit early for that.”

Separately, the new arm has awarded custody, middle and back-office outsourcing and accounting to Mellon Corp. Mellon’s affiliate Russell/Mellon will supply performance measurement and analytics.

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