S-4 1 a2218794zs-4.htm S-4

Use these links to rapidly review the document
TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on March 13, 2014

Registration No. 333-          

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Nuveen Investments, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  6282
(Primary Standard Industrial
Classification Code Number)
  36-3817266
(I.R.S. Employer
Identification Number)

333 West Wacker Drive
Chicago, Illinois 60606
(312) 917-7700

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

SEE TABLE OF ADDITIONAL REGISTRANTS



John L. MacCarthy
EVP, Secretary & General Counsel
Nuveen Investments, Inc.
333 West Wacker Drive
Chicago, Illinois 60606
(312) 917-7700

(Name, address, including zip code, and telephone number, including area code, of agent for service)



with a copy to:

Steven J. Gavin
Karen A. Weber
Winston & Strawn LLP
35 West Wacker Drive
Chicago, Illinois 60601
(312) 558-5600



Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

           If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o

           If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list Securities Act registration statement number of the earlier effective registration statement for the same offering. o

           If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

           Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

           If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

           Exchange Act Rule 13e-4(i) (Cross Border Issuer Tender Offer)                        o

           Exchange Act Rule 14d-1(d) (Cross Border Third Party Tender Offer)             o



CALCULATION OF REGISTRATION FEE

               
 
Title of each class of securities
to be registered

  Amount to be
registered

  Proposed maximum
offering price per
unit

  Proposed maximum
aggregate offering
price

  Amount of
registration fee(1)

 

9.125% Senior Notes due 2017

  $500,000,000   100%   $500,000,000   $64,400
 

Guarantees of 91/8% Senior Notes due 2017(2)

  N/A   N/A   N/A   N/A(3)
 

9.5% Senior Notes due 2020

  $645,000,000   100%   $645,000,000   $83,076
 

Guarantees of 91/2% Senior Notes due 2020(2)

  N/A   N/A   N/A   N/A(3)

 

(1)
Calculated pursuant to Rule 457(f) under the Securities Act of 1933, as amended (the "Securities Act").

(2)
The entities listed on the Table of Additional Registrants on the following page have guaranteed the notes being registered hereby.

(3)
Pursuant to Rule 457(n) under the Securities Act, no separate filing fee is required for the guarantees.



           The registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.


Table of Contents


TABLE OF ADDITIONAL REGISTRANTS

        The address and telephone number of the principal executive office of each additional registrant is c/o Nuveen Investments, Inc., 333 West Wacker Drive, Chicago, Illinois 60606, (312) 917-7700. The name, address and telephone number of the agent for service of each additional registrant is John L. MacCarthy, EVP, Secretary & General Counsel, Nuveen Investments, Inc., 333 West Wacker Drive, Chicago, Illinois 60606, (312) 917-7700.

Exact name of registrant as specified in its charter
  State or other
jurisdiction of
incorporation or
organization
  Primary
Standard
Industrial
Classification
Code Number
  I.R.S.
Employer
Identification
Number
 

Windy City Investments, Inc. 

  Delaware     6282     26-0373324  

Nuveen Asset Management, LLC

  Delaware     6282     27-4357327  

Nuveen Commodities Asset Management, LLC

  Delaware     6282     42-1683694  

Nuveen Fund Advisors, LLC

  Delaware     6282     31-0942504  

Nuveen Investments Advisers Inc. 

  Delaware     6282     04-3714572  

Nuveen Investments Holdings, Inc. 

  Delaware     6282     36-7364377  

Nuveen NWQ Holdings, LLC

  Delaware     6282     36-4709028  

Nuveen Tradewinds Holdings, LLC

  Delaware     6282     02-0767175  

Nuveen WCM Holdings, LLC

  Delaware     6282     37-1695518  

NWQ Investment Management Company, LLC

  Delaware     6282     47-0875103  

Santa Barbara Asset Management, LLC

  Delaware     6282     20-3432117  

Symphony Asset Management LLC

  California     6282     94-3252504  

Tradewinds Global Investors, LLC

  Delaware     6282     02-0767178  

Winslow Capital Management, LLC

  Delaware     6282     90-0860898  

Table of Contents

The information in this prospectus is not complete and may be changed. We may not issue the exchange notes in the exchange offers until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction where such offer or sale is not permitted.

Subject to Completion, dated March 13, 2014

LOGO

Nuveen Investments, Inc.

Offers to Exchange



          $500,000,000 aggregate principal amount of 9.125% Senior Notes due 2017 (the "exchange 2017 notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for any and all outstanding 9.125% Senior Notes due 2017 (the "outstanding 2017 notes"). The exchange 2017 notes and the outstanding 2017 notes are collectively referred to herein as the "2017 notes."

          $645,000,000 aggregate principal amount of 9.5% Senior Notes due 2020 (the "exchange 2020 notes" and together with the exchange 2017 notes, the "exchange notes"), which have been registered under the Securities Act, for any and all outstanding 9.5% Senior Notes due 2020 (the "outstanding 2020 notes" and, together with the outstanding 2017 notes, the "outstanding notes"). The exchange 2020 notes and the outstanding 2020 notes are collectively referred to herein as the "2020 notes" and the 2017 notes and the 2020 notes are collectively referred to herein as the "notes."

          The exchange notes will be our unsecured senior obligations and will rank equally in right of payment with all of our existing and future senior indebtedness and senior in right of payment to any future indebtedness that is subordinated in right of payment to the exchange notes. The exchange notes will be fully and unconditionally guaranteed on an unsecured basis by our parent company, Windy City Investments, Inc., and each of our existing and future restricted subsidiaries that guarantee indebtedness under our senior secured credit facility or any of our other indebtedness or have otherwise incurred certain amounts of indebtedness. Each exchange guarantee will be unsecured and will be subordinated in right of payment only to each guarantor's obligations under our senior secured credit facility and related hedging obligations and our other existing and future secured indebtedness. The exchange notes and the related exchange guarantees will be effectively subordinated to all of our and the guarantors' existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness.

          We are conducting the exchange offers in order to provide you with an opportunity to exchange your unregistered outstanding notes for freely tradeable exchange notes that have been registered under the Securities Act.



The Exchange Offers:

    We will exchange all outstanding notes that are validly tendered and not validly withdrawn for an equal principal amount of exchange notes that are freely tradeable.

    You may withdraw tenders of outstanding notes at any time prior to the expiration date of the applicable exchange offers.

    The exchange offers expire at 5:00 p.m., New York City time, on                        , 2014, which is the 21st business day after the date of this prospectus.

    The exchange of outstanding notes for exchange notes in the exchange offers will not be a taxable event for U.S. federal income tax purposes.

    The terms of the exchange notes will be identical in all material respects (including principal amount, interest rate, maturity and redemption rights) to the outstanding notes for which they may be exchanged, except that the exchange notes generally will not be subject to transfer restrictions or be entitled to registration rights and the exchange notes will not have the right to earn additional interest under circumstances relating to our registration obligations.

Results of the Exchange Offers:

    The exchange notes may be sold in the over-the-counter market, in negotiated transactions or through a combination of such methods. We do not plan to list the exchange notes on a national market.

          All untendered outstanding notes will continue to be subject to the restrictions on transfer set forth in such outstanding notes and in the applicable indentures. In general, the outstanding notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offers, we do not currently anticipate that we will register the outstanding notes under the Securities Act.



          You should carefully consider the "Risk Factors" beginning on page 18 of this prospectus before participating in the exchange offers.



          Each broker dealer that receives exchange notes for its own account pursuant to the exchange offers must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker dealer in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired as a result of market making activities or other trading activities. We have agreed that, for a period of 90 days after the expiration date of the exchange offers, we will make this prospectus, as amended or supplemented, available to such broker-dealer for use in connection with any such resale.

          Neither the Securities and Exchange Commission, any state securities commission nor any other regulatory authority, has approved or disapproved of the exchange notes to be distributed in the exchange offers nor have any of the foregoing authorities passed upon or endorsed the merits of this offering or the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                                    , 2014


Table of Contents


TABLE OF CONTENTS

 
  Page  

Where You Can Find Additional Information

    iii  

Non-GAAP Financial Measures

    iii  

Market and Industry Data

    iv  

Trademarks

    iv  

Cautionary Note Regarding Forward-Looking Statements

    iv  

Summary

    1  

Risk Factors

    18  

Use of Proceeds

    37  

Capitalization

    38  

Selected Historical Consolidated Financial and Operating Data

    39  

Management's Discussion and Analysis of Financial Condition and Results of Operations

    41  

Business

    73  

Security Ownership of Certain Beneficial Owners and Management

    88  

Certain Relationships and Related Party Transactions

    91  

Description of Other Indebtedness

    93  

Description of Notes

    99  

Management

    168  

The Exchange Offers

    191  

Certain U.S. Federal Income Tax Considerations

    202  

Certain ERISA Considerations

    203  

Plan of Distribution

    205  

Legal Matters

    206  

Experts

    206  

Index to Consolidated Financial Statements

    F-1  



        You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. This prospectus may be used only for the purposes for which it has been published and no person has been authorized to give any information not contained herein. If you receive any other information, you should not rely on it. We are not making an offer of the exchange notes and related exchange guarantees in any jurisdiction where the offer is not permitted. You should not interpret the delivery of this prospectus, or any sale of securities, as an indication that there has been no change in our affairs since the date of this prospectus. You should also be aware that information in this prospectus may change after this date.

        We have filed with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 with respect to the exchange notes. This prospectus, which forms part of such registration statement, does not contain all the information included in the registration statement, including its exhibits and schedules. For further information about us and the 2017 notes and the 2020 notes described in this prospectus, you should refer to the registration statement and its exhibits and schedules. Statements we make in this prospectus about certain contracts or other documents are not necessarily complete. When we make such statements, we refer you to the copies of the contracts or documents that are filed as exhibits to the registration statement, because those statements are qualified in all respects by reference to those exhibits. The registration statement, including the exhibits and schedules, is available at the SEC's website at www.sec.gov.

i


Table of Contents

        You may also obtain this information without charge by writing or telephoning us at the following address and telephone number:

Nuveen Investments, Inc.
333 West Wacker Drive
Chicago, Illinois 60606
(312) 917-7700
Attention: General Counsel

        To obtain timely delivery, security holders must request this information no later than five business days before the date they must make their investment decision. Security holders must request this information by                        , 2014.

        In making an investment decision, prospective investors must rely on their own examination of us and the terms of the offering, including the merits and risks involved. Prospective investors should not construe anything in this prospectus as legal, business or tax advice. Each prospective investor should consult its own advisors, as needed, to make its investment decision and to determine whether it is legally permitted to participate in the exchange offers under applicable legal investment or similar laws or regulations.

ii


Table of Contents


WHERE YOU CAN FIND ADDITIONAL INFORMATION

        We and our guarantors have filed with the SEC a registration statement on Form S-4 under the Securities Act with respect to the exchange notes. This prospectus, which forms a part of the registration statement, does not contain all of the information set forth in the registration statement. For further information with respect to us, our guarantors and the exchange notes, reference is made to the registration statement, as may be amended from time to time, and the exhibits and schedules filed with, and incorporated by reference into, the registration statement. Statements contained in this prospectus as to the contents of any contract or other document are not necessarily complete and, where such contract or other document is an exhibit to the registration statement, each such statement is qualified by the provisions in such exhibit, to which reference is hereby made. A copy of the registration statement, as may be amended from time to time, and the exhibits and schedules filed with, and incorporated by reference into, the registration statement may be inspected without charge at the SEC's Public Reference Room at 100 F Street, N.E., Washington D.C. 20549. Copies of such materials, including copies of all or any portion of the registration statement, can be obtained from the SEC's Public Reference Room at prescribed rates. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the public reference room. Such materials may also be accessed electronically by means of the SEC's home page on the Internet (http://www.sec.gov).


NON-GAAP FINANCIAL MEASURES

        EBITDA and Adjusted EBITDA, as presented in this prospectus, are supplemental measures of our performance that are not required by, and are not presented in accordance with, generally accepted accounting principles in the United States ("GAAP"). They are not measurements of our financial performance under GAAP and should not be considered as alternatives to revenues, net earnings (loss) or any other performance measures derived in accordance with GAAP or as alternatives to cash flow from operating activities as measures of our liquidity.

        EBITDA is defined as net income (loss) attributable to Nuveen Investments, Inc. and its consolidated subsidiaries before net interest expense, income taxes (benefit), depreciation and amortization and income (expense) attributable to consolidated variable interest entities. We calculate Adjusted EBITDA by adjusting EBITDA as described in footnotes 6 and 7 included in "Summary—Summary Historical Consolidated Financial and Operating Data." We believe presenting EBITDA and Adjusted EBITDA is useful to investors because it enables investors to evaluate how management views our businesses and because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies with substantial financial leverage. We also believe that the inclusion of the supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide additional information to investors about certain covenants that we expect to be required to satisfy under our senior secured credit facility and the exchange notes offered hereby.

        Our EBITDA and Adjusted EBITDA measures have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

    they do not reflect our cash expenditures or future requirements for capital commitments;

    they do not reflect changes in, or cash requirements for, our working capital needs;

    they do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

    they do not reflect any cash income taxes that we may be required to pay;

iii


Table of Contents

    they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;

    they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations;

    assets are depreciated or amortized over differing estimated useful lives and often have to be replaced in the future, and these measures do not reflect any cash requirements for such replacements;

    they do not reflect limitations on, or costs related to, transferring earnings from our subsidiaries to us; and

    other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.

        Because of these limitations, our EBITDA and Adjusted EBITDA measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations, including under our senior secured credit facility and the exchange notes offered hereby. You should compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures supplementally. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus for a description of our GAAP results. The footnotes describing adjustments to EBITDA included in this prospectus are unaudited. See footnotes 5, 6 and 7 included in "Summary—Summary Historical Consolidated Financial and Operating Data" for a description of the calculations of EBITDA and Adjusted EBITDA.


MARKET AND INDUSTRY DATA

        Market data and other statistical information used throughout this prospectus are based on independent industry publications, government publications, reports by market research firms or other published independent sources. Some data are also based on our good faith estimates, which are derived from our review of internal surveys, as well as the independent sources listed above. Although we believe these sources are reliable, we have not independently verified the information and cannot guarantee its accuracy and completeness.


TRADEMARKS

        This prospectus includes our trademarks such as "Nuveen Investments" which are protected under applicable intellectual property laws and are the property of Nuveen Investments, Inc. or its subsidiaries. This prospectus also contains trademarks, service marks, trade names and copyrights of other companies, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks and trade names.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus, and other information that we make publicly available, may contain forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Forward-looking statements are typically identified by words or phrases such as "trend," "potential," "opportunity," "pipeline," "believe," "comfortable,"

iv


Table of Contents

"expect," "anticipate," "current," "intention," "estimate," "position," "assume," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" and similar expressions. Examples of forward-looking statements include, among others, statements regarding future results of operations, earnings, liquidity and cash flow, capital expenditures, industry or market conditions, assets under management flows, acquisitions, divestitures and restructurings, debt and ability to obtain additional financing or make payments, regulatory developments and product demand and pricing.

        Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others:

    changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could have an adverse impact upon demand for our investment products and services or in the value of our assets under management;

    the relative and absolute investment performance of our investment products and services;

    the inability to access third-party distribution channels to market our investment products and services;

    our inability to attract new talent or the loss of key employees, which may result in increased outflows of assets under management;

    a change in the tax-exempt treatment of income from municipal bonds, which accounts for a substantial portion of our assets under management, because of, among other things, unfavorable changes in federal or state tax laws, adverse interpretations by the Internal Revenue Service (the "IRS") or state tax authorities or application of the federal alternative minimum tax, which could have an adverse effect upon demand for our municipal bond investment products and services and the value of our assets under management consisting of municipal bonds;

    the impact of reductions in the fees we receive for the investment management services we provide as a result of increased competition or otherwise;

    the impact of increased competition in the investment management industry;

    the effect of our substantial amount of outstanding indebtedness, including the possibility that our business may not generate sufficient cash flow from operations, or that future borrowings may not be available in amounts sufficient, to fulfill our debt obligations or to fund our other liquidity needs;

    the impact of a change in our asset mix to lower revenue generating assets;

    the adverse effects of volatility and illiquidity in the municipal bond market;

    the impact of a decline in the market for our retail advisory, institutional, and structured products;

    our inability to realize the anticipated benefits of past acquisitions and/or the impact of future acquisitions or divestitures;

v


Table of Contents

    our reliance on revenues from investment advisory contracts, which generally may be terminated on short or no notice and, with respect to closed-end and open-end funds, are also subject to annual renewal by the independent board of such funds;

    our reliance on revenues from fees tied to mutual fund assets under management, which may be redeemed by investors at any time without prior notice;

    the impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on products or transactions, which could have an adverse effect upon demand for our investment products and services, the value of our assets under management or our tax position or that of our subsidiaries;

    the impact of changes in generally accepted accounting principles;

    the failure to comply with various governmental regulations, including foreign, federal and state securities laws, rules and regulations promulgated by certain governmental agencies, including the SEC and the Commodity Futures Trading Commission, and the rules of certain self-regulatory organizations, including the Financial Industry Regulatory Authority ("FINRA") and the National Futures Association;

    the impact of legislative and regulatory actions and reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act;

    the unfavorable resolution of legal proceedings involving the securities industry generally or us specifically;

    terrorist activities, international hostilities and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or us specifically;

    the impact of adverse public disclosure, failures to follow client guidelines and other matters that could harm our reputation;

    exposure to international markets, which involve foreign currency exchange, tax, political, social and economic uncertainties and risks; and

    the impact of any failure of our operating personnel and systems to perform effectively.

        These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this prospectus are more fully described in "Risk Factors" and elsewhere in this prospectus. These factors may not be exhaustive, and we cannot predict the extent to which any factor, or combination of factors, may cause actual results to differ materially from those predicted in any forward-looking statements.

        Forward-looking statements speak only as of the date on which they are made. We undertake no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.

vi


 

Table of Contents


SUMMARY

        This summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information that may be important to you in making a decision to participate in the exchange offers. Before participating in the exchange offers, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes and the information set forth under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in each case included elsewhere in this prospectus. Unless the context suggests otherwise, references in this prospectus to "Nuveen Investments," the "Company," "we," "us" and "our" refer to Nuveen Investments, Inc., a Delaware corporation, together with its subsidiaries and predecessors. References to the "Issuer" refer to Nuveen Investments, Inc., exclusive of its subsidiaries. All references to years made in connection with our financial information or operating results are to years ended December 31, unless otherwise indicated.

Our Business

Our Company

        Founded in 1898, we are a leading provider of investment management and related services to individual and institutional investors. We market a wide range of specialized investment solutions which provide investors access to the capabilities of our boutique investment management affiliates, each of which has distinct investment processes and dedicated investment and research teams. Our investment management affiliates are supported by our scaled shared services platform, through which we provide assistance in distribution, marketing, product development and operations.

        We offer investment management capabilities across a broadly diversified set of asset classes and investment strategies through our investment management affiliates, including national and state specific municipal bond, investment grade, global and high-yield bond, floating-rate bank loan, preferred security, growth equity, value equity, global and international equity, equity income, core equity, equity index, quantitative and enhanced equity, asset allocation, balanced strategies, real asset and commodity. This broad diversification allows us to provide investment solutions for a wide range of investor needs and to offer products and services suited for various market environments.

        We provide investment management services through the investment products that we develop, market and distribute, including open-end mutual funds ("open-end funds" or "mutual funds"), closed-end funds ("closed-end funds"), managed accounts, collateralized loan/debt obligations ("CLO/CDOs"), commodity exchange-traded products, private funds, and Undertakings for Collective Investments in Transferable Securities funds ("UCITS funds"). We also provide investment management services on a direct basis or through sub-advisory relationships. Most of our investment management capabilities are offered in multiple product wrappers in order to provide customized investment solutions for investors.

        We distribute our investment products and services to retail and institutional investors primarily through intermediaries, including national and regional broker-dealers, independent broker-dealers, commercial banks and trust companies, insurance companies, consultants and investment advisors. We also distribute our investment products and services directly to institutional investors, including financial institutions and other corporate clients, pension and retirement plans, governmental entities, charities, endowments, foundations and family offices.

        Our seven independent, separately branded investment managers are: Nuveen Asset Management, LLC ("NAM"), providing investment solutions in multiple asset classes, from municipal and taxable fixed income to traditional and specialized equity; Symphony Asset Management LLC ("Symphony"), providing clients access to senior bank loans, high yield bonds, convertible bonds and equities, through long-short strategies, long-only strategies and structured products; NWQ Investment

 

1


Table of Contents

Management Company, LLC ("NWQ"), specializing in value style equities; Santa Barbara Asset Management, LLC ("Santa Barbara"), dedicated to dividend growth equities; Tradewinds Global Investors, LLC ("Tradewinds"), specializing in global and international equities; Winslow Capital Management, LLC ("Winslow Capital"), specializing in large-cap growth equities; and Gresham Investment Management LLC ("Gresham"), specializing in the management of diversified commodity investment portfolios using commodity futures and options.

        We present information regarding our assets under management in three categories of investment products and services: retail advisory, institutional, and structured products. Our retail advisory category represents Nuveen-sponsored open-end funds and retail managed accounts. Our institutional category represents institutional managed accounts, sub-advised mandates and Nuveen-sponsored UCITS funds. Our structured products category represents Nuveen-sponsored closed-end funds, CLO/CDOs, commodity exchange-traded products, and private funds.

        We also present information regarding our assets under management in three categories of investment strategy: credit based strategies, equity based strategies and multi-strategy and alternative assets. Our credit based strategies include national and state specific municipal bond, investment grade, global and high-yield bond, floating-rate bank loan, preferred security and other taxable fixed-income strategies. Our equity based strategies include growth equity, value equity, global and international equity, equity income, core equity, and equity index strategies. Our multi-strategy and alternative assets strategies include quantitative and enhanced equity, asset allocation, balanced strategies, real asset and commodity strategies.

        The charts below set forth our assets under management by product category and investment strategy as of December 31, 2013:

Net Assets Under Management
by Investment Strategy
  Net Assets Under Management
by Product Category



GRAPHIC

 



GRAPHIC

Our Competitive Strengths

        We believe that we are distinguished by the following competitive strengths:

        Distinct, scalable, multi-boutique model with specialized investment managers.    Our distinct multi-boutique model combines seven high quality, independent and specialized investment managers. We provide scaled distribution, service, operations and administrative support to each of our investment teams through our centralized platform. This distinct model enables our investment teams to remain focused upon delivering sustained investment performance with an emphasis on institutional quality investment processes.

        High quality investment capabilities built around distinctive brands.    We possess a strong company-wide investment culture with seven specialized independent investment managers marketed

 

2


Table of Contents

through our NAM, Symphony, NWQ, Santa Barbara, Tradewinds, Winslow Capital and Gresham brands. We believe that the institutional quality investment processes underlying each of these brands has led to superior long-term investment returns relative to our competitors and the relevant benchmarks. For the one, three and five-year periods ending December 31, 2013, 56%, 64% and 76% of our mutual fund assets under management, respectively, were ranked in the top two Lipper Analytics quartiles based upon total returns. Further, as of December 31, 2013, 53, or 65%, of our 81 mutual funds eligible for a Morningstar rating were rated four or five stars by Morningstar in at least one mutual fund share class. We ranked 7th out of 790 fund families based on the number of mutual funds rated 5 stars by Morningstar. For our managed accounts, 64%, 68% and 75% of our assets under management performance exceeded benchmark for the one, three and five-year periods ending December 31, 2013.

        Strong distribution capabilities with long-standing relationships.    We distribute our investment products and services to retail and institutional investors primarily through intermediaries, including national and regional broker-dealers, independent broker-dealers, commercial banks and trust companies, insurance companies, consultants and investment advisors. We also distribute our investment products and services directly to institutional investors, including financial institutions and other corporate clients, pension and retirement plans, governmental entities, charities, endowments, foundations and family offices. We have long-standing, diversified relationships with major wirehouses, including Bank of America Merrill Lynch, Morgan Stanley Smith Barney, UBS and Wells Fargo, and sold investments products totaling over $5.5 billion through this channel in 2013. In addition, we believe we are well positioned with regional broker-dealers, through which we sold products totaling $12.1 billion during the same period, and have strong relationships with large institutional consultants and direct plan sponsors. We did not have any distributor relationships that represented more than 10% of our revenue in 2013.

        Recurring and diverse revenues and cash flows.    A significant portion of our revenues and cash flows have a high degree of stability, in large part due to our closed-end fund business, which generated 35% of our advisory fee revenues for 2013. Assets in closed-end funds are not subject to redemption by investors in the funds and generally consist of high quality, income producing assets such as municipal bonds, providing stability in assets under management. In addition, our asset class diversification and broad product offerings allow us to respond to changes in prevailing investor sentiment, which helps mitigate the impact of market volatility.

        Historically strong financial and operational performance across various market conditions.    From December 31, 2003 through December 31, 2013, our aggregate assets under management have grown at a 9% compound annual growth rate (including market appreciation), with organic growth at an 8% compound annual growth rate. Also, our advisory fee revenues increased at a compound annual growth rate of 10% from December 31, 2003 through December 31, 2013. Our Adjusted EBITDA margin for 2013 was 45.7%.

        Leadership positions in important market segments.    We are the largest provider of closed-end funds, with $54.8 billion in assets under management as of December 31, 2013. We have expanded our closed-end fund offerings beyond their traditional municipal bond foundation to include a broad range of asset classes, including floating rate debt, preferred securities, mortgage backed securities, Build America Bonds, equity income, real asset and energy MLP, among others. During the five years ended December 31, 2013, we successfully completed 17 new closed-end fund offerings totaling approximately $3.8 billion (excluding greenshoe proceeds and leverage), or approximately 8.9% of new issuance market share according to Morningstar Traded Fund Center. In addition, we are also the third largest provider of retail managed accounts, with approximately $36.5 billion of assets under management as of December 31, 2013, and continue to maintain a strong market share in the wirehouses while building on our relationships in the regional broker dealer and registered investment advisor channels. As of

 

3


Table of Contents

December 31, 2013, our share of industry retail managed account assets was approximately 4.9% according to Cerulli Associates.

        Culture of product innovation.    We have focused on developing a company-wide culture of product innovation to anticipate the needs of both intermediaries and investors. As of December 31, 2013, approximately 11% of our assets under management were in products and strategies we did not offer five years earlier, which does not include assets under management in the products and strategies offered by Winslow Capital, FAF Advisors, Inc. ("FAF Advisors") and Gresham at the time we acquired those businesses. In developing new products, we focus on developing new investment solutions for our clients, creating new packaging formats for existing strategies and leveraging capabilities across our different managers to construct multi-strategy products. We strive to maintain a robust new product pipeline that we believe will be highly attractive to investors, including mutual funds, managed account strategies, closed-end funds and other structured products, among others.

        Experienced and dedicated management team.    Our deep and seasoned management team has, on average, over 12 years of experience with our company and has an average of approximately 24 years of experience in the asset management industry. Their long term focus on developing our business in a financially disciplined manner has resulted in our company achieving strong financial results in recent periods. In addition, our management team has overseen the transformation of our company through investments in new products, services and distribution capabilities and through acquisitions, which have substantially expanded our product portfolio and distribution reach. They have developed what we believe is a distinct and scalable operating model that provides high quality support to our investment managers.

Our Business Strategies

        Our overall objective is to provide high quality investment services and expand our product offerings to allow us to successfully serve our clients, grow our business and deliver strong financial results. We are focused on delivering growth in assets under management and generating high free cash flow, while continuing to prudently invest in new opportunities and innovative strategies. We continue to pursue the following strategies to achieve this objective:

        Expand our open-end mutual fund business.    We have enjoyed strong success in building out our open-end mutual fund businesses and have grown our mutual fund assets under management by a compound annual growth rate (including market appreciation) of 28% since December 31, 2008. Since December 31, 2008, we have recorded $14 billion in positive net flows in our mutual funds. We plan to continue to expand and broaden our open-end mutual fund offerings by providing the initial capital, development and sales support for new products with a focus on equity and taxable fixed income offerings. We also plan to leverage our established distribution relationships by cross selling fund products to financial advisors who currently sell our other products. In addition, we offer share classes for distribution to 401(k) and other defined contribution plans. Our mutual fund business was expanded significantly as a result of our strategic combination with U.S. Bank National Association's FAF Advisors in 2010.

        Further develop our institutional business.    We have heightened our emphasis on the institutional business over the last several years and, as a result, we have grown our institutional assets under management by a compound annual growth rate of 12% since December 31, 2007. We intend to continue to develop new institutional product strategies and structures and to expand our institutional sales reach, including the development of international clients. Each of our investment management affiliates has a dedicated institutional sales and service team, which receives support from our shared distribution platform. Our acquisition of Gresham in December 2011 expanded our institutional business and product offerings.

 

4


Table of Contents

        Grow core closed-end fund and retail managed account businesses.    We continue to maintain our leadership position in closed-end funds by developing new and innovative offerings focusing on income oriented products, with particular emphasis on products that seek to deliver steady cash flow and potential market appreciation. In addition, we continue to attempt to differentiate our closed-end funds by providing a high level of secondary market support. We continue to launch new and existing strategies from our investment teams onto the managed account platforms of the major wirehouses and regional broker-dealers. We leverage our sales and service infrastructure and distribution partner relationships in distributing retail managed accounts.

        Develop new areas of high quality investment specialization and enhance current platforms.    We believe we have a proven track record of identifying and growing high quality investment teams by leveraging the combination of the managers' strong investment capabilities with our scaled shared services platform, through which we provide assistance in distribution, marketing, product development and operations. As an example, the assets under management of Winslow Capital have grown to $37.7 billion as of December 31, 2013 from approximately $4.5 billion when we acquired Winslow Capital in December 2008. We are working with our investment teams to encourage expanding investment capabilities and developing new investment strategies from within their current capabilities. In addition, we continue to explore acquiring complementary investment capabilities. For example, we expanded our investment capabilities by acquiring Gresham, which specializes in the management of diversified commodity investment portfolios using commodity futures and options, in December 2011.

        Maintain and grow distribution and client relationships, including global expansion.    We will continue to focus on providing high quality service and support to the financial advisors at our distribution partners with our sales and service force of 191 professionals in order to strengthen our existing relationships. We plan to continue employing a consultative based approach in serving our clients' needs. We intend to continue to serve the financial advisors and institutional consultants who recommend our products by providing them with wealth management education, practice management training and client relationship management technology. In addition, we will continue to use our established relationships with our clients, particularly retail high-net-worth advisors, to cross-sell products from our different investment teams. Finally, we are looking to expand globally by offering our strategies to foreign investors through institutional managed accounts and funds launched on our UCITS platform pursuant to the European Communities (Undertakings for Collective Investments in Transferable Securities) Regulation 2003.

Our History

        Our company is the successor to a business formed in 1898 by Mr. John Nuveen that served as an underwriter and trader of municipal bonds. On June 19, 2007, Nuveen Investments entered into an agreement under which a group of private equity investors led by Madison Dearborn Partners, LLC ("MDP"), on behalf of certain of its affiliated investment funds, agreed to acquire all of the outstanding shares of the Company. On November 13, 2007 (the closing date of the transaction), Windy City Investments Holdings, L.L.C. ("Holdings") acquired all of the outstanding capital stock of the Company for approximately $5.8 billion in cash. Holdings' equity interests were owned by investment funds affiliated with MDP and certain other co-investors and certain of our employees, including senior management. Windy City Investments, Inc. ("Parent") and Windy City Acquisition Corp. (the "Merger Sub") were corporations formed by Holdings in connection with the acquisition and, concurrently with the closing of the acquisition, Merger Sub merged with and into the Company, which was the surviving corporation and assumed the obligations of the Merger Sub by operation of law. The merger and the related financing transactions are collectively referred to in this prospectus as the "MDP Transactions." Immediately following the merger, Nuveen Investments became a wholly owned direct subsidiary of Parent and a wholly owned indirect subsidiary of Holdings.

 

5


Table of Contents

        MDP is a leading private equity investment firm based in Chicago, Illinois that has raised over $18 billion of equity capital. Since its formation in 1992, it has invested in approximately 125 companies across a broad spectrum of industries, including basic industries, business and government services, consumer, financial and transaction services, healthcare and telecom, media and technology services. MDP's objective is to invest in companies in partnership with outstanding management teams to achieve significant long-term appreciation in equity value.

Corporate Information

        Our principal executive offices are located at 333 West Wacker Drive, Chicago, Illinois 60606, and our telephone number is (312) 917-7700. Our website is located at http://www.nuveen.com. The information on our website is not part of this prospectus and is mentioned for reference purposes only.

 

6


Table of Contents

 


THE EXCHANGE OFFERS

        The following summary is provided solely for your convenience and is not intended to be complete. You should read the full text and more specific details contained elsewhere in this prospectus for a more detailed description of the notes.

General

  On September 19, 2012 (the "issue date"), the Issuer issued in a private offering $500,000,000 aggregate principal amount of 9.125% Senior Notes due 2017 and $645,000,000 aggregate principal amount of 9.5% Senior Notes due 2020.

 

In connection with the private offerings, the Issuer and the guarantors of the outstanding notes entered into registration rights agreements with the initial purchasers pursuant to which they agreed, among other things, to:

 

file an exchange offer registration statement with the SEC within 18 months after the issue date;

 

use commercially reasonable efforts to cause the exchange offer registration statement to be declared effective by the SEC within 21 months after the issue date (or two years if reviewed by the SEC); and

 

use commercially reasonable efforts to consummate the exchange offers within 30 business days after the effectiveness of the exchange offer registration statement.

 

You are entitled to exchange in the exchange offers your outstanding notes for exchange notes which are identical in all material respects to the outstanding notes except:

 

the exchange notes have been registered under the Securities Act;

 

the exchange notes are not entitled to any registration rights which are applicable to the outstanding notes under the applicable registration rights agreements; and

 

the additional interest provisions of the applicable registration rights agreements are not applicable.

The Exchange Offers

 

The Issuer is offering to exchange:

 

$500,000,000 aggregate principal amount of 9.125% Senior Notes due 2017 which have been registered under the Securities Act for any and all of its existing 9.125% Senior Notes due 2017; and

 

$645,000,000 aggregate principal amount of 9.5% Senior Notes due 2020 which have been registered under the Securities Act for any and all of its existing 9.5% Senior Notes due 2020.

 

You may only exchange outstanding notes in a principal amount of $2,000 or in integral multiples of $1,000 in excess thereof.

 

7


Table of Contents

Resale

 

Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, we believe that the exchange notes issued pursuant to the exchange offers in exchange for outstanding notes may be offered for resale, resold and otherwise transferred by you (unless you are our "affiliate" within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:

 

you are acquiring the exchange notes in the ordinary course of your business; and

 

you have not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the exchange notes.

 

If you are a broker-dealer and receive exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market-making activities or other trading activities, you must acknowledge that you will deliver this prospectus in connection with any resale of the exchange notes. See "Plan of Distribution."

 

Any holder of outstanding notes who:

 

is our affiliate;

 

does not acquire exchange notes in the ordinary course of its business; or

 

tenders its outstanding notes in the exchange offers with the intention to participate, or for the purpose of participating, in a distribution of exchange notes;

 

cannot rely on the position of the staff of the SEC enunciated in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC's letter to Shearman & Sterling (available July 2, 1993), or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes.

Expiration Date

 

The exchange offers will expire at 5:00 p.m., New York City time, on                , 2014, which is the 21st business day after the date of this prospectus, unless extended by the Issuer. The Issuer does not currently intend to extend the expiration date.

Withdrawal

 

You may withdraw the tender of your outstanding notes at any time prior to the expiration of the exchange offers. The Issuer will return to you any of your outstanding notes that are not accepted for any reason for exchange, without expense to you, promptly after the expiration or termination of the exchange offers.

 

8


Table of Contents

Interest on the exchange notes and the outstanding notes

 

The exchange notes will bear interest at their respective rate per annum set forth on the cover page of this prospectus from the most recent date to which interest has been paid on the outstanding notes. The interest will be payable semi-annually in cash in arrears on April 15 and October 15. No interest will be paid on outstanding notes following their acceptance for exchange.

Conditions to the Exchange Offers

 

The exchange offers are subject to customary conditions, which the Issuer may waive.

 

See "The Exchange Offers—Conditions to the Exchange Offers."

Procedures for Tendering Outstanding Notes

 

If you wish to participate in the exchange offers, you must complete, sign and date the accompanying letter of transmittal, or a facsimile of such letter of transmittal, according to the instructions contained in this prospectus and the letter of transmittal. You must then mail or otherwise deliver the letter of transmittal, or a facsimile of such letter of transmittal, together with the outstanding notes and any other required documents, to the exchange agent at the address set forth on the cover page of the letter of transmittal.

 

If you hold outstanding notes through The Depository Trust Company ("DTC") and wish to participate in the exchange offers, you must comply with the Automated Tender Offer Program procedures of DTC, by which you will agree to be bound by the letter of transmittal. By signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:

 

you are not our "affiliate" within the meaning of Rule 405 under the Securities Act or, if you are our affiliate, that you will comply with any applicable registration and prospectus delivery requirements of the Securities Act;

 

you do not have an arrangement or understanding with any person or entity to participate in the distribution of the exchange notes;

 

you are acquiring the exchange notes in the ordinary course of your business; and

 

if you are a broker-dealer that will receive exchange notes for your own account in exchange for outstanding notes that were acquired as a result of market-making activities, that you will deliver a prospectus, as required by law, in connection with any resale of such exchange notes.

 

9


Table of Contents

Special Procedures for Beneficial Owners

 

If you are a beneficial owner of outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender those outstanding notes in the exchange offers, you should contact the registered holder promptly and instruct the registered holder to tender those outstanding notes on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your outstanding notes, either make appropriate arrangements to register ownership of the outstanding notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.

Guaranteed Delivery Procedures

 

If you wish to tender your outstanding notes and your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or any other required documents, or you cannot comply with the applicable procedures under DTC's Automated Tender Offer Program for transfer of book-entry interests, prior to the expiration date, you must tender your outstanding notes according to the guaranteed delivery procedures set forth in this prospectus under "The Exchange Offers—Guaranteed Delivery Procedures."

Effect on Holders of Outstanding Notes

 

As a result of the making of, and upon acceptance for exchange of all validly tendered outstanding notes pursuant to the terms of, the exchange offers, the Issuer and the guarantors will have fulfilled certain covenants under the applicable registration rights agreements. Accordingly, there will be no increase in the interest rate on the outstanding notes under the circumstances described in the applicable registration rights agreements. If you do not tender your outstanding notes in the exchange offers, you will continue to be entitled to all the rights and limitations applicable to the outstanding notes as set forth in the applicable indentures, except the Issuer and the guarantors will not have any further obligation to you to provide for the exchange and registration of the outstanding notes under the applicable registration rights agreements. To the extent that outstanding notes are tendered and accepted in the exchange offers, the trading market for remaining outstanding notes that are not so tendered and exchanged could be adversely affected.

 

10


Table of Contents

Consequences of Failure to Exchange

 

All untendered outstanding notes will continue to be subject to the restrictions on transfer set forth in the outstanding notes and in the applicable indentures. In general, the outstanding notes may not be offered or sold unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offers, the Issuer and the guarantors do not currently anticipate that they will register the outstanding notes under the Securities Act.

Certain U.S. Federal Income Tax Considerations

 

The exchange of outstanding notes for exchange notes in the exchange offers will not be a taxable event for U.S. federal income tax purposes. See "Certain U.S. Federal Income Tax Considerations."

Use of Proceeds

 

We will not receive any cash proceeds from the issuance of exchange notes in the exchange offers. See "Use of Proceeds."

Exchange Agent

 

U.S. Bank National Association is the exchange agent for the exchange offers. The addresses and telephone numbers of the exchange agent are set forth in this prospectus under "The Exchange Offers—Exchange Agent."

 

11


Table of Contents

 


THE EXCHANGE NOTES

        The terms of the exchange notes are identical in all material respects to the terms of the outstanding notes, except that the exchange notes will not contain terms with respect to transfer restrictions or additional interest upon a failure to fulfill certain of our obligations under the applicable registration rights agreements. The exchange notes will evidence the same debt as the outstanding notes. The exchange notes will be governed by the same applicable indentures under which the outstanding notes were issued. The following summary is not intended to be a complete description of the terms of the exchange notes. For a more detailed description of the notes, see "Description of Notes."

Issuer

  Nuveen Investments, Inc.

Notes Offered

 

$500,000,000 aggregate principal amount of 9.125% Senior Notes due 2017 (the "exchange 2017 notes") and $645,000,000 aggregate principal amount of 9.5% Senior Notes due 2020 (the "exchange 2020 notes" and, together with the exchange 2017 notes, the "exchange notes").

Maturity

 

The exchange 2017 notes mature on October 15, 2017 and the exchange 2020 notes mature on October 15, 2020.

Interest

 

The exchange 2017 notes will accrue interest at a rate of 9.125% per annum and the exchange 2020 notes will accrue interest at a rate of 9.5% per annum.

 

Interest on the exchange notes will be payable semi-annually in cash in arrears on April 15 and October 15 of each year.

Guarantees

 

The exchange notes will be fully and unconditionally guaranteed, jointly and severally, by Parent, and each of our existing and future restricted subsidiaries that guarantee indebtedness under our senior secured credit facility or any of our other indebtedness or have otherwise incurred certain amounts of indebtedness (each, a "guarantor"). These guarantees are subject to release under certain circumstances. See "Description of Notes—Guarantees" and "Description of Notes—Certain Covenants—Additional Guarantees." Our obligations under our senior secured credit facility are guaranteed by Parent and each of our existing and future wholly owned material subsidiaries (excluding broker-dealer subsidiaries, foreign subsidiaries and domestic subsidiaries whose only assets are equity interests in foreign subsidiaries).

Ranking

 

The exchange notes will be our unsecured senior obligations and will rank equally in right of payment with all of our existing and future senior indebtedness and senior in right of payment to any future indebtedness that is subordinated in right of payment to the exchange notes.

 

12


Table of Contents

 

The related guarantees will be the guarantors' unsecured obligations and will be subordinated in right of payment to their obligations under our senior secured credit facility and related hedging obligations and our other existing and future secured indebtedness. Each guarantor's guarantee will rank senior in right of payment to any future indebtedness of such guarantor that is subordinated in right of payment to the guarantee.

 

The exchange notes and related guarantees will be effectively subordinated to all of our and the guarantors' existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and will be structurally subordinated to all of the existing and future liabilities (including trade payables) of each of our subsidiaries that do not guarantee the exchange notes. Our non-guarantor subsidiaries had aggregate net operating revenues of $87.5 million (excluding $120.3 million in intercompany revenue) for the year ended December 31, 2013, and at December 31, 2013, had total assets and total liabilities of $695 million and $25 million, respectively.

 

As of December 31, 2013, we and the guarantors had approximately $4.5 billion of total indebtedness outstanding, of which approximately $3.1 billion was secured indebtedness and none of which would have been subordinated to the exchange notes or the related guarantees.

Optional Redemption

 

We may redeem the exchange 2017 notes, in whole or in part, at any time prior to October 15, 2014 and the exchange 2020 notes, in whole or in part, at any time prior to October 15, 2016, in each case, at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest plus the applicable make-whole premium described under "Description of Notes—Optional Redemption." We may redeem the exchange 2017 notes, in whole or in part, at any time on or after October 15, 2014 and the exchange 2020 notes, in whole or in part, at any time on or after October 15, 2016, in each case, at the applicable redemption prices listed under "Description of Notes—Optional Redemption."

Optional Redemption After Equity Offerings

 

At any time on or prior to October 15, 2014 with respect to the exchange 2017 notes and October 15, 2015 with respect to the exchange 2020 notes, we may, at our option, choose to redeem up to 35% of the then outstanding exchange 2017 notes or exchange 2020 notes, as the case may be, with net cash proceeds from one or more equity offerings, so long as:

 

we pay 109.125% of the face amount of any such exchange 2017 notes and 109.5% of the face amount of any such exchange 2020 notes, in each case, plus accrued and unpaid interest;

 

13


Table of Contents

 

we redeem such exchange notes within 90 days of completing the equity offering; and

 

at least 65% of the aggregate principal amount of outstanding notes originally issued remains outstanding afterwards.

Change of Control Offer

 

Upon the occurrence of certain change of control events you will have the right, as a holder of the exchange notes, to require us to purchase some or all of your exchange notes at 101% of the principal amount thereof, plus accrued and unpaid interest. See "Description of Notes—Repurchase at the Option of Holders—Change of Control."

Certain Covenants

 

The indentures governing the exchange notes contain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to:

 

incur additional indebtedness;

 

make certain distributions, investments and other restricted payments;

 

dispose of our assets;

 

grant liens on our assets;

 

engage in transactions with affiliates; and

 

merge or consolidate or transfer substantially all of our assets.

 

These covenants are subject to a number of important exceptions and qualifications. In addition, certain of these covenants will cease to apply to the exchange notes for so long as the exchange notes have investment grade ratings from both Moody's Investor Service, Inc. and Standard & Poor's Rating Group. See "Description of Notes—Certain Covenants."

Use of Proceeds

 

We will not receive any proceeds from the exchange offers. See "Use of Proceeds."

No Prior Market

 

The exchange notes will generally be freely transferable (subject to certain restrictions discussed in "The Exchange Offers") but will be a new issue of securities for which there will not initially be a market. Accordingly, there can be no assurance as to the development or liquidity of any market for the exchange notes. We do not intend to apply for a listing of the exchange notes on any securities exchange or automated dealer quotation system.


RISK FACTORS

        You should carefully consider the information set forth under the heading "Risk Factors" beginning on page 18 of this prospectus before deciding to participate in the exchange offers.

 

14


 

Table of Contents


SUMMARY HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA

        The following tables set forth summary historical consolidated financial and operating data as of the dates and for the periods indicated. The historical consolidated statement of operations data presented below for the years ended December 31, 2013, 2012 and 2011 and the historical consolidated balance sheet data as of December 31, 2013 and 2012 have been derived from, and should be read together with, our audited consolidated financial statements and the related notes thereto included elsewhere in this prospectus, which statements have been audited by KPMG LLP, whose report on our audited consolidated financial statements is included in this prospectus. The historical consolidated statement of operations data presented below for the years ended December 31, 2010 and 2009 and the historical consolidated balance sheet data as of December 31, 2011, 2010 and 2009 have been derived from our audited consolidated financial statements not included in this prospectus. The historical results presented below are not necessarily indicative of the results to be expected for any future period and should be read in conjunction with "Selected Historical Consolidated Financial and Operating Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

 
  For the Year Ended December 31,  
 
  2009   2010   2011   2012   2013  

Statement of Operations Data (in thousands):

                               

Operating Revenues:

                               

Investment advisory fees from assets under management           

  $ 608,655   $ 733,518   $ 973,900   $ 991,729   $ 977,414  

Income from CLOs/CDOs

    11,661     13,291     19,255     33,398     50,830  

Product distribution

    16,127     20,519     20,217     21,678     20,625  

Performance fees/other revenue           

    41,880     24,821     15,839     57,168     27,476  
                       

Total operating revenues

    678,323     792,149     1,029,211     1,103,973     1,076,345  

Operating Expenses:

                               

Compensation and benefits

    273,567     329,712     432,830     472,854     468,914  

Advertising and promotional costs

    5,898     9,030     12,881     15,134     13,643  

Intangible asset impairment

                586,715      

All other operating expenses           

    248,590     270,311     303,033     344,644     279,941  
                       

Total operating expenses

    528,055     609,053     748,744     1,419,347     762,498  

Other Operating—Contingent Consideration

   
   
   
   
(29,300

)
 
87,200
 

Other Income/(Expense)

   
16,540
   
42,445
   
29,975
   
(120,051

)
 
(96,791

)

Net Interest Expense

   
(306,642

)
 
(309,552

)
 
(320,416

)
 
(340,270

)
 
(283,759

)

Consolidated VIEs and funds, net

   
135,273
   
109,787
   
(16,472

)
 
(72,921

)
 
11,862
 

Income/(Loss) Before Taxes

   
(4,561

)
 
25,776
   
(26,446

)
 
(877,916

)
 
32,359
 

Income Tax Expense/(Benefit)           

   
(40,133

)
 
(25,733

)
 
(6,291

)
 
(240,730

)
 
(42,385

)
                       

Net Income/(Loss)

    35,572     51,509     (20,155 )   (637,186 )   74,744  
                       

Less: Net Income/(Loss) attributable to Noncontrolling Interests

    1,653     87,426     (7,171 )   (66,188 )   29,516  

Net Income/(Loss) attributable to Nuveen Investments           

  $ 33,919   $ (35,917 ) $ (12,984 ) $ (570,998 ) $ 45,228  
                       
                       

Balance Sheet Data, at period end (in thousands):

                               

Cash and cash equivalents(1)

  $ 290,085   $ 127,714   $ 212,258   $ 290,289   $ 324,717  

Total assets(1)

    6,249,049     5,992,041     6,863,251     6,263,226     6,298,190  

Total debt, including current portion(1)(2)

    3,984,831     3,694,588     4,034,366     4,419,990     4,482,668  

Total Nuveen Investments' shareholders' equity(1)

    968,121     1,005,512     980,166     396,107     452,405  

 

15


Table of Contents

 

 
  For the Year Ended December 31,  
 
  2009   2010   2011   2012   2013  

Operating Data (in millions):

                               

Net Assets Under Management, at period end

                               

Retail Advisory

  $ 59,851   $ 85,464   $ 84,096   $ 86,469   $ 87,692  

Institutional

    33,618     58,022     72,665     60,707     62,229  

Structured Products

    51,327     53,316     63,335     71,379     70,583  
                       

Total

  $ 144,796   $ 196,802   $ 220,096   $ 218,555   $ 220,504  
                       
                       

Net Investment Product Flows(3)

                               

Retail Advisory

  $ 1,473   $ 2,621   $ 255   $ (2,433 )   (2,305 )

Institutional

    156     8,882     12,097     (16,752 )   (9,172 )

Structured Products

    (457 )   2,056     1,482     4,943     2,693  
                       

Total

  $ 1,172   $ 13,559   $ 13,834   $ (14,242 ) $ (8,784 )
                       
                       

 
  For the Year Ended December 31,  
 
  2009   2010   2011   2012   2013  

Other Financial Data (dollars in thousands):

                               

Depreciation and amortization

  $ 85,517   $ 86,989   $ 93,332   $ 95,641   $ 69,309  

Cash interest expense(4)

    298,676     295,679     302,647     329,407     279,566  

Capital expenditures

    10,815     17,674     49,791     44,176     18,712  

Cash flow provided by (used in):

                               

Operating activities

    (64,043 )   28,289     180,952     60,148     145,624  

Financing activities

    (38,608 )   (126,197 )   288,477     239,648     (66,279 )

Investing activities(1)

    (58,977 )   (64,461 )   (395,170 )   (221,721 )   (45,026 )

EBITDA(5)(7)

    250,672     309,942     402,049     (398,982 )   351,186  

Adjusted EBITDA(6)(7)

    379,732     470,746     571,391     524,871     492,437  

Ratio of net senior secured debt to Adjusted EBITDA(8)

    4.6x  

Ratio of net secured debt to Adjusted EBITDA

    5.6x  

Ratio of net total debt to Adjusted EBITDA

    9.1x  

Ratio of Adjusted EBITDA to cash interest expense

    1.8x  

(1)
Excludes assets and liabilities of consolidated variable interest entities. We are required to consolidate in our financial statements (a) Symphony CLO V, Ltd., in which we hold no ownership interest, because MDP is considered the primary beneficiary of Symphony CLO V, (b) other collateralized loan and debt obligations for which Symphony acts as collateral manager and (c) certain funds managed by Gresham. See Notes 1 and 3 of the notes to our consolidated financial statements for the year ended December 31, 2013 included elsewhere in this prospectus.

(2)
Includes net remaining unamortized discount and debt issuance costs.

(3)
Net flows of investment products represent the sum of sales, reinvestments and exchanges, less redemptions.

(4)
Excludes cash interest expense attributable to consolidated variable interest entities.

(5)
EBITDA is defined as net income/(loss) attributable to Nuveen Investments before net interest expense, income tax/(benefit), depreciation and amortization and income/(expense) attributable to consolidated variable interest entities. See note 7 below for a reconciliation of EBITDA to net income/(loss) attributable to Nuveen Investments, as determined under GAAP.

(6)
Adjusted EBITDA is calculated in accordance with the credit agreement governing our senior secured credit facility and adjusts EBITDA for, among other things, non-cash compensation, structured products distribution expense, retention, severance and recruiting expense. See note 7 below for a reconciliation of Adjusted EBITDA to net income/(loss) attributable to Nuveen Investments, as determined under GAAP.

(7)
EBITDA and Adjusted EBITDA are supplemental measures of our performance that are not required by, and are not presented in accordance with, GAAP. They are not measurements of our financial performance under GAAP and should not be considered as alternatives to revenues, net earnings/(loss) or any other performance measures derived in accordance with GAAP or as alternatives to cash flow from operating activities as measures of our liquidity. The use of EBITDA and Adjusted EBITDA instead of income/(loss) from operations has limitations as an analytical tool, including the inability to determine profitability, the

 

16


Table of Contents

    exclusion of interest expense and associated significant cash requirements, which represent significant and unavoidable operating costs given the level of our indebtedness. Management compensates for these limitations by relying primarily on our GAAP results and by presenting EBITDA and Adjusted EBITDA only supplementally. Our management believes presenting EBITDA and Adjusted EBITDA is useful to investors because it enables investors to evaluate how management views our businesses and because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies with substantial financial leverage. Our presentation of EBITDA and Adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. See "Non-GAAP Financial Measures."

    EBITDA and Adjusted EBITDA are reconciled from net income/(loss) attributable to Nuveen Investments, as determined under GAAP, as follows:

 
  For the Year Ended December 31,  
(in thousands)
  2009   2010   2011   2012   2013  

Net income/(loss) attributable to Nuveen Investments

  $ 33,919   $ (35,917 ) $ (12,984 ) $ (570,998 ) $ 45,228  

Net (income)/loss attributable to Symphony CLO V

    (135,273 )   (24,949 )   7,576     (23,165 )   (4,725 )

Net interest expense excluding consolidated variable interest entities

    306,642     309,552     320,416     340,270     283,759  

Income tax benefit

    (40,133 )   (25,733 )   (6,291 )   (240,730 )   (42,385 )

Depreciation and amortization

    85,517     86,989     93,332     95,641     69,309  

EBITDA

    250,672     309,942     402,049     (398,982 )   351,186  

Adjustments:

                               

Non-cash compensation

    56,994     64,030     54,460     77,061     51,013  

Structured products distribution expense(a)

    16,907     23,246     12,389     43,803     10,116  

Retention, severance, and recruiting expense(b)

    42,460     46,626     35,452     56,692     51,690  

Goodwill, intangible and other impairment

                586,715      

Acquisitions(c)

        34,515     55,642     29,972     (87,301 )

Other adjustments(d)

    12,699     (7,613 )   11,399     129,610     115,733  

Adjusted EBITDA

  $ 379,732   $ 470,746   $ 571,391   $ 524,871   $ 492,437  

(a)
Structured products distribution expense represents structuring fees and upfront distribution costs paid for closed-end funds, mutual funds, and other structured products such as collateralized loan and debt obligations.

(b)
Retention, severance, and recruiting expense represents costs associated with employee retention programs, costs related to employee severance agreements and costs to recruit employees, such as relocation expense.

(c)
Amounts in 2010 related to the acquisition of the long-term asset management business of U.S. Bank National Association's FAF Advisors. Amounts in 2011 related to the acquisition of Gresham. Amounts in 2012 and 2013 reflect the fair value change on the Gresham contingent consideration.

(d)
Other adjustments include, but are not limited to, non-recurring items, such as gains and losses on certain investments, mark-to-market on hedging activity, impairment charges, loss on debt restructuring, and other adjustments.
(8)
Senior secured debt excludes our second lien term loans.

 

17


Table of Contents

RISK FACTORS

        You should carefully consider the following risk factors and all other information contained in this prospectus before participating in the exchange offers. The risks and uncertainties described below are not the only risks facing us and your investment in the exchange notes. Additional risks and uncertainties that we are unaware of, or those we currently deem immaterial, also may become important factors that affect us. The following risks could materially and adversely affect our business, prospects, financial condition, cash flows or results of operations.

Risks Related to the Exchange Offers

If you choose not to exchange your outstanding notes in the exchange offers, the transfer restrictions currently applicable to your outstanding notes will remain in force and the market price of your outstanding notes could decline.

        If you do not exchange your outstanding notes for exchange notes in the exchange offers, then you will continue to be subject to the transfer restrictions on the outstanding notes as set forth in the offering memoranda distributed in connection with the private offerings of the outstanding notes. In general, the outstanding notes may not be offered or sold unless they are registered or exempt from registration under the Securities Act and applicable state securities laws. Except as required by the applicable registration rights agreements, we do not intend to register resales of the outstanding notes under the Securities Act.

        The tender of outstanding notes under the exchange offers will reduce the remaining principal amount of the outstanding notes, which may have an adverse effect upon and increase the volatility of, the market price of the outstanding notes due to reduction in liquidity.

Your ability to transfer the exchange notes may be limited by the absence of an active trading market, and an active trading market may not develop for the exchange notes.

        The exchange notes are a new issue of securities for which there is no established trading market. We do not intend to have the exchange notes listed on a national securities exchange or to arrange for quotation on any automated quotation system. Therefore, we cannot assure you as to the development or liquidity of any trading market for the exchange notes. The liquidity of any market for the exchange notes will depend on a number of factors, including:

    the number of holders of exchange notes;

    our operating performance and financial condition;

    the market for similar securities;

    the interest of securities dealers in making a market in the exchange notes; and

    prevailing interest rates.

        Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the exchange notes. The market, if any, for the exchange notes may face similar disruptions that may adversely affect the prices at which you may sell your exchange notes. Therefore, you may not be able to sell your exchange notes at a particular time and the price that you receive when you sell may not be favorable.

You may not receive the exchange notes in the exchange offer if the exchange offer procedures are not properly followed.

        We will issue the exchange notes in exchange for your outstanding notes only if you properly tender the outstanding notes before expiration of the exchange offers. Neither we nor the exchange

18


Table of Contents

agent are under any duty to give notification of defects or irregularities with respect to the tenders of the outstanding notes for exchange. If you are the beneficial holder of outstanding notes that are held through your broker, dealer, commercial bank, trust company or other nominee, and you wish to tender such notes in the exchange offers, you should promptly contact the person through whom your outstanding notes are held and instruct that person to tender on your behalf.

Broker-dealers may become subject to the registration and prospectus delivery requirements of the Securities Act and any profit on the resale of the exchange notes may be deemed to be underwriting compensation under the Securities Act.

        Any broker-dealer that acquires exchange notes in the exchange offer for its own account in exchange for outstanding notes which it acquired through market-making or other trading activities must acknowledge that it will comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction by that broker-dealer. Any profit on the resale of the exchange notes and any commission or concessions received by a broker-dealer may be deemed to be underwriting compensation under the Securities Act.

Risks Related to Our Business

Difficult market conditions can adversely affect our business in many ways, including by reducing the value of our assets under management and causing clients to withdraw funds, each of which could materially reduce our revenues and adversely affect our financial condition.

        A large portion of our revenues is derived from the fees we earn under our investment advisory contracts. Under these contracts, the investment advisory fees we receive are typically based on the market value of assets under management and, to a much lesser extent, investment performance. The market value of our assets under management may decline due to any number of factors beyond our control, including, among others, a declining stock market, rising interest rates, general economic downturn, political uncertainty or acts of terrorism. Furthermore, our clients may terminate our investment advisory contracts or reduce their investments upon short or no notice for any reason, including adverse market conditions. Our assets under management may also decrease as a result of investors in the mutual funds we advise redeeming their investments in those funds in response to adverse market conditions. These investors may redeem without prior notice and for any reason.

        In periods of difficult market conditions, we may experience accelerated client redemptions or withdrawals which, along with market depreciation, could materially reduce the market value of our assets under management. For example, the global economic environment deteriorated sharply in 2008, particularly in the third and fourth quarters, and in the first quarter of 2009, with virtually every class of financial asset and geographic market experiencing significant price declines and volatility. As a result of market depreciation and net redemptions, our assets under management decreased from $164.3 billion at December 31, 2007 to $115.3 billion at March 31, 2009. Although our assets under management have increased to $220.5 billion at December 31, 2013, there is no guarantee that our assets under management will similarly rebound in the event of another downturn. If any of these factors cause a decline in our assets under management, it would result in lower revenues from investment advisory fees. If our revenues decline without a commensurate reduction in our expenses, our net income will be reduced and our business will be negatively affected.

Fluctuations in equity markets may adversely affect our business.

        As of December 31, 2013, approximately 35% of our assets under management were equity assets. As noted above, there have been substantial fluctuations in price levels in securities markets in recent years, including equity markets. These fluctuations can occur on a daily basis and over longer periods as a result of a variety of factors, including national and international economic and political events,

19


Table of Contents

broad trends in business and finance, and interest rate movements. Reduced equity market prices generally may result in lower levels of assets under management and the loss of, or reduction in, incentive and performance fees, each of which will result in reduced revenues. Periods of reduced equity market prices may adversely affect our profitability if we do not reduce our fixed costs to offset such reduced revenues.

Fluctuations in interest rates may adversely affect our business.

        As of December 31, 2013, approximately 54% of our assets under management were credit based strategies. Increases in interest rates from their present levels may adversely affect the values of fixed income securities. Increases in interest rates may have a magnified adverse effect on our leveraged closed-end funds. The value of fixed income securities may also decline as a result of the issuer's actual or perceived creditworthiness or ability to meet its obligations. During 2008, particularly in the fourth quarter of 2008, there were several disruptions in the credit markets and periods of illiquidity. This resulted in a decline in the value of the fixed income securities that we managed reducing our assets under management. Although fixed income securities markets have stabilized, these conditions could recur.

        Fluctuations in interest rates may also have a significant impact on securities markets generally, which may adversely affect the market value of our assets under management invested in equity securities.

Poor investment performance by our investment products and services may adversely affect our assets under management and financial results, along with our ability to market future product and service offerings.

        The performance of our investment products and services is critical in retaining existing client assets under management as well as attracting new client assets. Our investment products and services can perform poorly for a number of reasons, including general market conditions, investment decisions that we make and the performance of the companies in which our investment products invest. If our investment products and services perform poorly, our earnings could decline because:

    our existing clients may withdraw funds from our investment products or terminate their relationships with us, which would cause the revenues that we generate from investment advisory fees to decline;

    our ability to earn performance fees under certain of our investment advisory contracts will be reduced or diminished;

    the Morningstar and Lipper ratings and rankings of mutual funds we manage may decline, which may adversely affect the ability of those funds to attract new or retain existing assets; or

    third-party financial intermediaries, advisors or consultants may rate our investment products poorly, which may lead our existing clients to withdraw funds from our investment products or reduce asset inflows from these third parties or their clients.

        While clients do not have legal recourse against us solely on the basis of poor investment results, if our investment products and services perform poorly, we are more likely to become subject to litigation brought by dissatisfied clients. In addition, to the extent clients are successful in claiming that their losses resulted from fraud, negligence, willful misconduct, breach of contract or other similar misconduct, these clients may have remedies against us and/or our investment professionals under federal securities laws and/or state law.

20


Table of Contents

The loss of key investment professionals or members of our senior management team could have a material adverse effect on our business.

        We depend on the skills and expertise of our investment professionals. Our success depends on our ability to retain the key members of our investment teams, who possess substantial experience in investing and have been primarily responsible for the historically strong investment performance we have achieved. In particular, we depend on our portfolio managers. Because of the long tenure and stability of our portfolio managers, our clients generally attribute the investment performance we have achieved to these individuals. While we have generally experienced very few departures among our portfolio managers, there can be no assurance that this stability will continue in the future. The departure of a portfolio manager could cause clients to withdraw funds from the investment products he or she manages, which would reduce our assets under management. For example, on March 14, 2012, we announced the departure of the Co-President and Chief Investment Officer of Tradewinds, which focuses on global equity investment products. As a result of this departure, we experienced a significant increase in redemptions on global/international value style products managed by Tradewinds. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Flows."

        A reduction in assets under management resulting from the loss of key investment professionals will result in a decline in investment advisory fees and, if we were not able to reduce our expenses sufficiently, our net income, and these reductions could be material. The departure of an investment product's portfolio manager also could cause clients to refrain from allocating additional funds to such investment product or delay such additional funds until a sufficient track record under a new portfolio manager or managers has been established. This would have a negative effect on the future growth of our assets under management. Because certain of our portfolio managers contribute significantly to our revenues and net income, the loss of even a small number of them could have a disproportionate impact on our business.

        The market for qualified investment, management, marketing and client service professionals is extremely competitive and we may fail to successfully attract and retain qualified personnel in the future. Due to the competitive market for these professionals and the success of some of our personnel, our costs associated with providing compensation incentives necessary to attract and retain key personnel are significant and will likely increase over time. Although we intend for overall compensation levels to remain competitive, we may not be successful in designing and implementing an attractive compensation model. Any cost-reduction initiative or adjustments or reductions to compensation could negatively impact our ability to retain key personnel. In addition, changes to our management structure, corporate culture and corporate governance arrangements could negatively impact our ability to retain key personnel.

        We also depend on the contributions of our senior management team led by John P. Amboian, our Chief Executive Officer. In addition, our senior marketing and client service personnel have direct contact with our institutional clients and consultants and other key individuals within each of our distribution channels. The loss of any of these key professionals could limit our ability to successfully execute our business strategy and may prevent us from sustaining the historically strong financial and operational performance we have achieved or adversely affect our ability to retain existing and attract new client assets and related revenues.

We face substantial competition in the investment management business.

        The asset management industry in which we are engaged is extremely competitive, and we face substantial competition in all aspects of our business. We compete with numerous international and domestic asset management firms and broker-dealers, mutual fund companies, hedge funds, commercial banks, insurance companies and other investment companies and financial institutions. Many of these

21


Table of Contents

organizations offer products and services that are similar to, or compete with, those offered by us, and some have substantially more personnel and greater financial resources and/or assets under management than we do. Some of our competitors have proprietary products and distribution channels that may make it more difficult for us to compete with them.

        A sizable number of new asset management firms and mutual funds have been established in the last ten years, increasing our competition. In addition, the asset management industry has experienced consolidation as numerous asset management firms have either been acquired by other financial services firms or have ceased operations. In many cases, this has resulted in firms having greater financial resources than us. In addition, a number of heavily capitalized companies, including commercial banks and foreign entities, have made investments in and acquired asset management firms. Access to brokerage firms' retail distribution systems, "wrap fee" retail managed account programs, and mutual fund and other distribution channels has also become increasingly competitive. All of these factors could make it more difficult for us to compete and no assurance can be given that we will be successful in competing and growing or maintaining our assets under management and business. If clients and potential clients decide to use the services of competitors, it could reduce our revenues and growth rate, and if our revenues decrease without a commensurate reduction in our expenses, our net income will be reduced.

        In addition, in part as a result of the substantial competition in the asset management industry, there has been a trend toward lower fees in some segments of the asset management business. In order for us to maintain our fee structure in a competitive environment, we must be able to provide clients with investment returns and service that will encourage them to be willing to pay such fees. There can be no assurance that we will be able to maintain our current fee structure or provide our clients with attractive investment returns, or that we will be able to develop new products that are desirable to the market or our distribution partners. Fee reductions on existing or future business could have an adverse impact on our revenue and profitability.

The historical returns of our existing investment products may not be indicative of their future results or of the investment products we may develop in the future.

        We have presented ratings and rankings of our investment products based on the historical returns of our existing investment strategies elsewhere in this prospectus. The historical returns of our products and the ratings and rankings we or the mutual funds that we advise have received in the past should not be considered indicative of the future results of these products or of any other products that we may develop in the future. The investment performance we achieve for our clients varies over time and the variance can be wide. The ratings and rankings we or the mutual funds we advise have received are typically revised monthly. The historical performance and ratings and rankings presented herein are as of December 31, 2013 and for periods then ended. The performance we have achieved and the ratings and rankings received at subsequent dates and for subsequent periods may be higher or lower and the difference could be material. Our products' returns have benefited during some periods from investment opportunities and positive economic and market conditions. In other periods, such as in 2008, the first quarter of 2009 and the second quarter of 2010, general economic and market conditions have negatively affected investment opportunities and our products' returns. These negative conditions may occur again, and in the future we may not be able to identify and invest in profitable investment opportunities within our current or future products.

22


Table of Contents

Our business relies on third-party distributors who may choose not to sell or recommend our products or who may increase the costs of distribution.

        Our ability to distribute our products is highly dependent on access to the client base of financial advisors that also offer competing investment products. Financial advisors who recommend our products may reduce or eliminate their involvement in marketing our products at any time, or may elect to emphasize the investment products of competing sponsors, or the proprietary products of their own firms. In addition, financial advisors may receive compensation incentives to sell their firm's investment products or may choose to recommend to their customers investment products sponsored by firms other than us. Further, expenses associated with maintaining access to third-party distribution programs may increase in the future as a result of efforts by distribution firms to defray a portion of their costs of internal customer account related services in connection with their customers' investments in our products. Finally, a financial advisors's ability to distribute our mutual funds is subject to the continuation of a selling agreement between the firm with which the advisor is affiliated and us. We cannot be sure that we will continue to gain access to these financial advisors. The inability to have this access could have a material adverse effect on our business.

        The firms through which we distribute closed-end funds charge structuring fees in connection with bringing closed-end funds to market. These fees have significantly increased our costs for new closed-end funds, thereby reducing our margins on these products.

Our efforts to establish new investment teams and products may be unsuccessful and could negatively impact our results of operations and our reputation.

        As part of our growth strategy, we may seek to take advantage of opportunities to add new investment teams. To the extent we are unable to recruit and retain investment teams that will complement our existing business model, we may not be successful in further diversifying our investment products and client assets, any of which could have a material adverse effect on our business and future prospects. In addition, the costs associated with establishing a new team and investment strategy initially will exceed the revenues they generate. If any such new products perform poorly and fail to attract sufficient assets to manage, our results of operations will be negatively impacted. In addition, a new product's poor performance may negatively impact our reputation and the reputation of our other investment products within the investment community.

The investment products managed by us may make significant investments in international markets, which involve foreign currency exchange, tax, political, social and economic uncertainties and risks.

        The investment products we manage may invest significant funds in international markets. Fluctuations in foreign currency exchange rates could negatively affect the returns of our clients who are invested in these products. In addition, an increase in the value of the U.S. dollar relative to non-U.S. currencies is likely to result in a decrease in the U.S. dollar value of our assets under management, which, in turn, could result in lower revenue since we report our financial results in U.S. dollars. Investments in non-U.S. issuers may also be affected by tax positions taken in countries or regions in which we are invested as well as political, social and economic uncertainty. Declining tax revenues may cause governments to assert their ability to tax the local gains and/or income of foreign investors (including our clients), which could adversely affect clients' interests in investing outside their home markets. Many financial markets are not as developed, or as efficient, as the U.S. financial markets, and, as a result, those markets may have limited liquidity and higher price volatility. Liquidity may also be adversely affected by political or economic events within a particular country, and our ability to dispose of an investment may also be adversely affected if we increase the size of our investments in smaller non-U.S. issuers. Non-U.S. legal and regulatory environments, including financial accounting standards and practices, may also be different, and there may be less publicly available information about non-U.S. companies. The risks associated with these factors could adversely affect

23


Table of Contents

the performance of our products that are invested in international markets resulting in lower levels of assets under management and the loss of, or reduction in, incentive and performance fees, each of which will result in reduced revenues. These risks may be particularly acute in the emerging or less developed markets in which we invest.

If our asset mix changes, our revenues and operating margins could be reduced.

        Our assets under management can generate different revenues per dollar of assets under management based on factors such as the type of asset managed by us, the type of client, the type of asset management product or service provided and the fee schedule of the asset manager providing the service. A shift in the mix of our assets under management from higher revenue-generating assets to lower revenue-generating assets may result in a decrease in our revenues even if our aggregate level of assets under management remains unchanged or increases.

Our business is subject to extensive regulation, and compliance failures and changes in laws and regulations could adversely affect us.

        Our business is subject to extensive regulation, including regulations arising under federal and state securities laws, rules promulgated by the SEC and the Commodity Futures Trading Commission ("CFTC"), and the rules of certain self-regulatory organizations, including FINRA and the National Futures Association. Our failure to comply with applicable laws, regulations or rules of self-regulatory organizations could cause regulatory authorities to institute proceedings against us or our subsidiaries and could result in the imposition of sanctions ranging from censure and fines to termination of an investment adviser or broker-dealer's registration and otherwise prohibiting an investment adviser from acting as an investment adviser. Changes in laws, regulations, rules of self-regulatory organizations or in governmental policies, and unforeseen developments in litigation targeting the securities industry generally or us, could have a material adverse effect on us. The impact of future accounting pronouncements could also have a material adverse effect upon us.

        In addition, changes in regulations or industry-wide or specifically targeted regulatory or court decisions may require us to reduce our fee levels, or restructure the fees we charge. For example, distribution fees paid to mutual fund distributors in accordance with Rule 12b-1 under the Investment Company Act of 1940, as amended (the "Investment Company Act"), are a significant element of revenues for a number of the mutual funds that we manage. There have been suggestions from regulatory agencies and other industry participants that Rule 12b-1 distribution fees in the mutual fund industry should be reconsidered and, potentially, reduced or eliminated. Any industry-wide reduction or restructuring of Rule 12b-1 distribution fees could have an adverse effect on our revenues and net income.

        Our investment adviser subsidiaries are registered with the SEC as investment advisers under the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"). The Investment Advisers Act imposes numerous obligations on registered investment advisers, including fiduciary, recordkeeping, operational and disclosure obligations. In light of recent allegations of fraud against certain other investment advisers, we anticipate substantially increased regulation of investment advisers.

        Each of our closed-end funds and open-end funds is registered with the SEC under the Investment Company Act and the shares of each closed-end fund and open-end fund are registered with the SEC under the Securities Act. Each national open-end fund is qualified for sale (or not required to be so qualified) in all states in the United States and the District of Columbia. Each single-state open-end fund is qualified for sale (or not required to be so qualified) in the state for which it is named and other designated states.

24


Table of Contents

        Our subsidiary, Nuveen Securities, LLC, is registered as a broker-dealer under the Exchange Act and is subject to regulation by the SEC, FINRA and federal and state agencies. Our broker-dealer subsidiary is subject to the SEC's net capital rules and certain state securities laws designed to enforce minimum standards regarding the general financial condition and liquidity of a broker-dealer. Under certain circumstances, these rules would limit our ability to make withdrawals of capital and receive dividends from our broker-dealer subsidiary. The securities industry is one of the most highly regulated in the United States, and failure to comply with the related laws and regulations can result in revocation of broker-dealer licenses, the imposition of censures or fines and the suspension or expulsion from the securities business of a firm, its officers or employees.

        In February 2012, the CFTC adopted amendments to existing rules that have subjected certain of our mutual funds, closed-end funds and certain other products we sponsor that invest in futures, swaps or other derivatives to regulation by the CFTC as commodity pools. Certain of our subsidiaries, including Gresham, are registered as Commodity Pool Operators and Commodity Trading Advisors with the CFTC and are subject to regulation by the National Futures Association. We will incur ongoing costs associated with monitoring compliance with the CFTC registration and exemption obligations and complying with the periodic reporting requirements of Commodity Pool Operators.

        Our investment management subsidiaries are subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and to regulations promulgated thereunder, insofar as they act as a "fiduciary" under ERISA with respect to benefit plan clients. ERISA and applicable provisions of the Internal Revenue Code of 1989, as amended (the "Internal Revenue Code"), impose duties on persons who are fiduciaries under ERISA, prohibit specified transactions involving ERISA plan clients and provide monetary penalties for violations of these prohibitions. The failure of any of our subsidiaries to comply with these requirements could result in significant penalties that could reduce our net income.

        A change in the tax-exempt treatment of income from municipal bonds, which accounts for a substantial portion of our assets under management, because of, among other things, unfavorable changes in federal or state tax laws or adverse interpretations by the IRS or state tax authorities, could have an adverse effect upon demand for our municipal bond investment products and services and the value of our assets under management consisting of municipal bonds. Changes in the status of tax deferred retirement plan investments, the capital gains and corporate dividend tax rates, and other individual and corporate tax rates and regulations could also affect investor behavior and cause investors to view certain investment offerings less favorably, thereby decreasing our assets under management.

        On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended (the "Dodd-Frank Act"), which imposes significant new regulations on almost every aspect of the U.S. financial services industry, including aspects of our business and the markets in which we operate. The Dodd-Frank Act has and will likely continue to increase our regulatory compliance burden and may have a material adverse effect on us by increasing the costs associated with our investment products and services. Many of the provisions of the Dodd-Frank Act are subject to further rulemaking, implementation and, ultimately, the discretion of regulatory bodies. As a result, it is too early to fully assess the impact of the Dodd-Frank Act and subsequent regulatory rulemaking processes on our business, financial condition or results of operations.

        Pursuant to the mandate of the Dodd-Frank Act, the CFTC and the SEC have promulgated rules that increase the regulation of over-the-counter derivatives markets. The implementing regulations require many types of derivatives that were previously traded over-the-counter to be executed in regulated markets and submitted for clearing to regulated clearinghouses. Complying with the new regulations may significantly increase the costs of derivatives trading on behalf of our clients.

25


Table of Contents

Our business involves risk of being engaged in litigation that could increase our expenses and reduce our net income.

        There has been an increased incidence of litigation and regulatory investigations in the asset management industry in recent years, including customer claims as well as class action suits seeking substantial damages. In addition, we, along with other industry participants, are subject to risks related to litigation, settlements and regulatory investigations arising from market events. We could become involved in such litigation become or the subject of such a regulatory investigation, which could adversely affect us.

Investors in the mutual funds and certain other pooled investment vehicles that we advise can redeem their investments in those funds at any time without prior notice, which could adversely affect our earnings.

        Investors in the mutual funds that we advise or sub-advise may redeem their investments in those mutual funds at any time without prior notice and investors in certain other types of pooled investment vehicles that we advise or sub-advise may typically redeem their investments on fairly limited or no prior notice, thereby reducing the aggregate amount of our assets under management. These investors may redeem for any number of reasons, including general financial market conditions, the absolute or relative investment performance we have achieved, or their own financial condition and requirements. In a declining stock market or a rising interest-rate environment, the pace of redemptions could accelerate. Poor investment performance relative to other funds tends to result in decreased purchases and increased redemptions of fund shares. For the twelve months ended December 31, 2013, we generated over 28% of our investment advisory fee revenues from advising mutual funds, and the redemption of investments in those funds would adversely affect our revenues and could have a material adverse effect on our earnings.

We derive a substantial portion of our revenues from contracts and relationships that may be terminated upon short or no notice.

        A substantial portion of our revenues is derived from the fees we earn under our investment advisory contracts. Our investment advisory contracts with SEC-registered fund clients may be terminated without penalty by the client upon 60 days' written notice. Furthermore, each registered fund's investment advisory contract must be approved annually by the board of the respective fund, including a majority of the board members who are not "interested persons" of our relevant advisory subsidiary or the fund, as defined in the Investment Company Act.

        Our investment advisory agreements with advisory clients, other than registered fund clients, generally provide that they can be terminated without penalty upon 60 days' written notice or less. These investment advisory agreements and client relationships may be terminated or not renewed for any number of reasons. The decrease in revenues that could result from the termination of a material client relationship or group of client relationships could have a material adverse effect on our business.

A change of control of our company could result in termination of our investment advisory agreements.

        Under the Investment Company Act, each of the investment advisory agreements for SEC-registered funds that we advise automatically terminates in the event of its assignment, as defined under the Investment Company Act. If such an assignment were to occur, we could continue to act as adviser to any such fund only if that fund's board and shareholders approved a new investment advisory agreement, except in the case of certain of the funds that we sub-advise for which only board approval would be necessary. In addition, under the Investment Advisers Act, each of the investment advisory agreements for the separate accounts we manage may not be assigned without the consent of the client. An assignment may occur under the Investment Company Act and the Investment Advisers Act if, among other things, the company undergoes a change of control.

26


Table of Contents

        MDP, by virtue of its right to effectively appoint a majority of our board of directors pursuant to Holdings' limited liability company agreement (through its affiliated investment funds), is currently deemed to control our company for purposes of the Investment Company Act and the Investment Advisers Act. If MDP ceases to so control our company, or if there were a change of control at MDP, an assignment is likely to be deemed to have occurred and we will be required to seek the necessary approvals for new registered fund investment advisory agreements and consents from our separate account clients. If an assignment occurs as a result of a change of control of our company, we cannot be certain that we will be able to obtain the necessary approvals from the boards and shareholders of the registered funds that we advise or the necessary consents from our separate account clients. The decrease in revenues that could result from a failure by us to obtain such approvals and consents could have a material adverse effect on our business.

Damage to our reputation or our failure to follow client guidelines could have an adverse effect on us.

        Maintaining the trust and confidence of clients and other market participants, and the resulting good reputation, is important to our business. Our reputation is vulnerable to many threats that can be difficult or impossible to control, and difficult and costly to remediate. Regulatory inquiries, employee misconduct and rumors, among other things, can substantially damage our reputation, even if they are baseless or satisfactorily addressed. Any damage to our reputation could impede our ability to attract and retain clients and key personnel, and lead to a reduction in the amount of our assets under management, any of which could have a material adverse effect on our revenues and net income.

        When clients retain us to manage assets or provide products or services on their behalf, they specify guidelines or contractual requirements that we are required to observe in the provision of our services. In addition, we are required to abide by certain conflict of interest policies and regulations. A failure to comply with these guidelines, contractual requirements, policies and regulations could result in damage to our reputation or to the client seeking to recover losses from us, reducing its assets that we manage or terminating its contract with us, any of which could have an adverse impact on our business.

We may explore strategic transactions, such as acquisitions of other companies, asset sales or a potential merger, and the expected benefits of such strategic transactions may not materialize, which may prevent us from implementing strategies to grow our business.

        The acquisition of complementary businesses has been and may continue to be an active part of our overall business strategy. There can be no assurance that we will find suitable acquisition candidates at acceptable prices, have sufficient capital resources to accomplish our strategy, obtain the necessary financing on satisfactory terms or be successful in entering into agreements for desired transactions. Successful completion of acquisitions, asset sales or any other strategic transaction we identify depends on a number of factors that are not entirely within our control, including our ability to negotiate acceptable terms, conclude satisfactory agreements and obtain all necessary regulatory approvals and investment advisory agreement consents. In addition, depending on how any such transaction is structured, there may be an adverse impact on our capital structure. We may incur significant costs arising from our efforts to engage in strategic transactions, and such costs may exceed the returns that we realize from a given transaction. Moreover, these expenditures may not result in the successful completion of a transaction.

        Acquisitions pose the risk that the acquired companies could lose customers or employees or could underperform relative to expectations. We could also experience financial or other setbacks or experience adverse accounting consequences in connection with an acquisition, such as the need to make large provisions against the acquired assets or to write down the acquired assets. In addition, we may not be able to effectively integrate the services, key personnel or businesses of acquired companies

27


Table of Contents

into our business, in which case the anticipated benefits of the transaction may not be realized fully or at all or may take longer to realize than expected.

The performance of our investment strategies or the growth of our assets under management may be constrained by unavailability of appropriate investment opportunities.

        The ability of our investment teams to deliver strong investment performance depends in large part on their ability to identify appropriate investment opportunities in which to invest client assets. If the investment team for any of our strategies is unable to identify sufficient appropriate investment opportunities for existing and new client assets on a timely basis, the investment performance of the products they manage could be adversely affected. In addition, if we determine that sufficient investment opportunities are not available for a product, we may choose to limit the growth of the product by limiting the rate at which we accept additional client assets for management under the product, closing the product to all or substantially all new investors or otherwise taking action to limit the flow of assets into the product. If we misjudge the point at which it would be optimal to limit access to or close a product, the investment performance of the product could be negatively impacted. The risk that sufficient appropriate investment opportunities may be unavailable is influenced by a number of factors, including general market conditions, but is particularly acute with respect to our products that focus on small-cap and emerging market investments, and is likely to increase as our assets under management increase, particularly if these increases occur very rapidly.

Our business is subject to numerous operational risks, any of which could disrupt our ability to function effectively.

        We must be able to consistently and reliably obtain securities pricing information, process client and investor transactions and provide reports and other customer service to our clients and investors. Any failure to keep current and accurate books and records can render us liable to disciplinary action by governmental and self-regulatory authorities, as well as to claims by our clients. If any of our financial, portfolio accounting or other data processing systems do not operate properly or are disabled or if there are other shortcomings or failures in our internal processes, people or systems, we could suffer an impairment to our liquidity, a financial loss, a disruption of our businesses, liability to clients, regulatory problems or damage to our reputation. These systems may fail to operate properly or become disabled as a result of events that are wholly or partially beyond our control, including a disruption of electrical or communications services or our inability to occupy one or more of our buildings. In addition, our operations are dependent upon information from, and communications with, third parties, and operational problems at third parties may adversely affect our ability to carry on our business.

        Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks. Although we take protective measures and endeavor to modify them as circumstances warrant, our computer systems, software and networks may be vulnerable to unauthorized access, computer viruses or other malicious code, and other events that have a security impact. If one or more of such events occur, it potentially could jeopardize our or our clients' or counterparties' confidential and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our, our clients', our counterparties' or third parties' operations. We may be required to spend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance that we maintain.

        A disaster or a disruption in the infrastructure that supports our asset managers, or an event disrupting the ability of our employees to perform their job functions, including terrorist attacks or a disruption involving electrical communications, transportation or other services used by us or third

28


Table of Contents

parties with whom we conduct business, could have a material adverse impact on our ability to continue to operate our business without interruption. Although we have disaster recovery programs in place, there can be no assurance that these will be sufficient to mitigate the harm that may result from such a disaster or disruption. In addition, insurance and other safeguards might only partially reimburse us for our losses.

        In order to manage the significant risks inherent in our business, we must maintain effective policies, procedures and systems that enable us to identify, monitor and control our exposure to operational, legal and reputational risks. Our risk management methods may prove to be ineffective due to their design or implementation, or as a result of the lack of adequate, accurate or timely information or otherwise. If our risk management efforts are ineffective, we could suffer losses that could have a material adverse effect on our financial condition or operating results. Additionally, we could be subject to litigation, particularly from our clients, and sanctions or fines from regulators. Our techniques for managing risks in client portfolios may not fully mitigate the risk exposure in all economic or market environments, or against all types of risk, including risks that we might fail to identify or anticipate.

Our controlling equity holder may have conflicts of interest with us or the holders of the notes in the future.

        Pursuant to the limited liability company operating agreement of Holdings, an investment fund affiliated with MDP is entitled to appoint a majority of the members of Holdings' board of managers, and therefore ultimately controls all of our affairs and policies, including the election of our board of directors, appointing members of our management, the approval of certain actions such as amending our charter, commencing bankruptcy proceedings and taking certain corporate actions (including, without limitation, incurring debt, issuing stock, selling assets and engaging in mergers and acquisitions). Investment funds affiliated with MDP own a significant amount of Holdings' equity interests and may have an incentive to increase the value of their investment or cause us to distribute funds at the expense of our financial condition, which may affect our ability to make payments on the notes. For more information see "Security Ownership of Certain Beneficial Owners and Management" and "Certain Relationships and Related Party Transactions." Additionally, MDP is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. MDP may also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. So long as investment funds affiliated with MDP continue to own a significant amount of Holdings' equity interests and retain manager appointment rights pursuant to the limited liability company agreement of Holdings, MDP will continue to be able to strongly influence or effectively control our decisions.

        The indentures governing the notes allow us and our subsidiaries to engage in transactions with our affiliates subject to certain limitations set forth therein. See "Description of Notes—Certain Covenants—Transactions with Affiliates."

Risks Related to the Notes and Our Indebtedness

We are highly leveraged and our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the notes.

        We are highly leveraged and have a substantial amount of indebtedness, which requires significant interest and principal payments. As of December 31, 2013, we had approximately $4.5 billion in aggregate principal amount of indebtedness outstanding (excluding indebtedness at consolidated variable interest entities). Subject to the limits contained in the credit agreement governing our senior secured credit facility, the indentures governing the notes and our other debt instruments, we may be able to incur substantial additional debt from time to time to finance working capital, capital

29


Table of Contents

expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our substantial amount of indebtedness could increase.

        Our substantial amount of indebtedness could have important consequences to the holders of the notes, including:

    making it more difficult for us to satisfy our obligations with respect to the notes and our other indebtedness;

    limiting our ability to obtain additional financing to fund working capital, capital expenditures, acquisitions or other general corporate requirements;

    requiring a substantial portion of our cash flows to be dedicated to the payment of our indebtedness instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes;

    increasing our vulnerability to general adverse economic and industry conditions;

    making us more vulnerable to increases in interest rates, as borrowings under our senior secured credit facility are at variable rates of interest;

    limiting our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate;

    placing us at a competitive disadvantage compared to our competitors that are less leveraged; and

    and increasing our cost of borrowing.

See "Capitalization" and "Description of Certain Other Indebtedness."

Despite our current level of indebtedness, we may be able to incur additional indebtedness and enter into other transactions, which could further exacerbate the risks related to our substantial indebtedness described above.

        We may be able to incur additional indebtedness in the future. As of December 31, 2013, we had $190.0 million of availability to incur secured indebtedness under our senior secured revolving credit facility. Moreover, although the credit agreement governing our senior secured credit facility and the indentures governing the notes each contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and the indebtedness incurred in compliance with these restrictions could be material. Also, these restrictions do not prevent us from incurring obligations that do not constitute indebtedness. To the extent we incur additional indebtedness, the substantial risks described in the previous risk factor would increase. See "Description of Notes" and "Description of Certain Other Indebtedness."

Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly.

        Borrowings under our senior secured credit facility are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources, Liquidity and Financial Condition—Derivative Instruments" for information regarding our interest rate hedging activities.

30


Table of Contents

We may be unable to service our indebtedness, including the notes.

        Our ability to make scheduled payments on and to refinance our indebtedness, including the notes, depends on and is subject to our financial and operating performance, which in turn is affected by prevailing economic, financial, competitive, legislative, legal, regulatory, business and other factors beyond our control, including the availability of financing in the banking and capital markets. See "—Risks Related to Our Business." We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our indebtedness, including the notes, to refinance our indebtedness or to fund our other liquidity needs.

        Moreover, the Issuer is a holding company and accordingly is dependent upon distributions from its subsidiaries to make payments in respect of the notes. The Issuer has no independent means of generating revenue. To the extent that the Issuer needs funds and its subsidiaries are unable or otherwise restricted from making such distributions under applicable law or regulation, the Issuer's liquidity and financial condition would be adversely affected and the Issuer may be unable to satisfy its obligations under the notes or under its other indebtedness. See "—Risks Related to the Notes and Our Indebtedness—Our ability to make payments on the notes depends on our ability to receive dividends or other distributions from our subsidiaries."

        If we are unable to meet our debt service obligations or to fund our other liquidity needs, we will need to pursue one or more alternative strategies, such as selling assets, refinancing or restructuring our indebtedness or selling equity capital. However, we cannot assure you that any alternative strategy will be feasible at the time or provide adequate funds to allow us to pay our debts as they come due and fund our other liquidity needs. The credit agreement governing our senior secured credit facility and the indentures governing the notes restrict our ability to sell assets and use the proceeds from such sales. Additionally, we may not be able to refinance any of our indebtedness on commercially reasonable terms, or at all. If we cannot service our indebtedness, it could impede the implementation of our business strategy or prevent us from entering into transactions that would otherwise benefit our business.

        Furthermore, in the event of a default, the holders of our indebtedness, including the notes and borrowings under our senior secured credit facility, could elect to declare all the funds borrowed to be due and payable, together with accrued and unpaid interest. If we are forced to refinance these borrowings on less favorable terms or cannot refinance these borrowings, our results of operations and financial condition could be adversely affected. The lenders under our senior secured credit facility could also elect to terminate their commitments thereunder, cease making further loans, and institute foreclosure proceedings against their collateral, and we could be forced into bankruptcy or liquidation.

Our ability to make payments on the notes depends on our ability to receive dividends or other distributions from our subsidiaries

        Our cash flow and our ability to service our debt, including the notes, is dependent upon the earnings of our subsidiaries. Our subsidiaries are separate and distinct legal entities. Payment to us by our subsidiaries will be contingent upon our subsidiaries' earnings and other business considerations. In addition, our broker-dealer subsidiary is subject to certain rules imposed by the FINRA, which could have the effect of prohibiting that subsidiary from distributing or withdrawing capital and requiring prior notice to the SEC and FINRA for certain withdrawals of capital. Our broker-dealer subsidiary accounted for approximately 2% of our revenues (excluding intercompany revenues) for the year ended December 31, 2013 and represented less than 1% of our assets at December 31, 2013.

31


Table of Contents

The indentures governing the notes and the credit agreement governing our senior secured credit facility impose significant operating and financial restrictions on us, which may prevent us from capitalizing on business opportunities.

        The indentures governing the notes and the credit agreement governing our senior secured credit facility impose significant operating and financial restrictions on us. These restrictions, subject to certain exceptions, limit our ability to, among other things:

    incur or guarantee additional indebtedness or issue preferred stock;

    pay dividends or make other distributions on, ore redeem or repurchase, capital stock;

    make certain investments;

    incur certain liens;

    transfer or sell assets and subsidiary capital stock;

    enter into transactions with affiliates;

    alter the business that we conduct;

    designate our subsidiaries as unrestricted subsidiaries; and

    enter into mergers, consolidations and sales of substantially all assets.

The credit agreement governing our senior secured credit facility also contains a financial maintenance covenant that prohibits us from exceeding a specified ratio of (i) funded senior first lien secured indebtedness less unrestricted cash and cash equivalents to (ii) consolidated adjusted EBITDA, as defined in the credit agreement. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources, Liquidity and Financial Condition—Senior Secured Credit Facility" for information regarding this financial maintenance covenant.

        As a result of these restrictions, we are limited as to how we conduct our business and we may be unable to finance our future operations or capital needs or engage in other business activities that may be in our interest. The terms of any future indebtedness we may incur could include more restrictive covenants. Our ability to comply with these covenants may be affected by events beyond our control. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers and/or amend the covenants in order to avoid an event of default.

        Our failure to comply with the covenants described above as well as other terms of our existing indebtedness and/or the terms of any future indebtedness from time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings prior to maturity, together with accrued and unpaid interest. If we are forced to refinance these borrowings on less favorable terms or cannot refinance these borrowings, our results of operations and financial condition could be adversely affected. The lenders under our senior secured credit facility could also elect to terminate their commitments thereunder, cease making further loans, and institute foreclosure proceedings against their collateral, and we could be forced into bankruptcy or liquidation.

Our failure to comply with the agreements relating to our outstanding indebtedness, including as a result of events beyond our control, could result in an event of default that could materially and adversely affect our results of operations and our financial condition.

        If there were an event of default under any of the agreements relating to our outstanding indebtedness, the holders of the defaulted debt could cause all amounts outstanding with respect to that debt to be due and payable immediately. We cannot assure you that our assets or cash flows would be sufficient to fully repay borrowings under our outstanding debt instruments if accelerated upon an event of default. If we are forced to refinance these borrowings on less favorable terms or cannot

32


Table of Contents

refinance these borrowings, our results of operations and financial condition could be adversely affected. Furthermore, if we are unable to repay, refinance or restructure our indebtedness under our secured debt, the holders of such debt could proceed against the collateral securing that indebtedness, and we could be forced into bankruptcy or liquidation. In addition, any event of default or declaration of acceleration under one debt instrument could also result in an event of default under one or more of our other debt instruments.

The notes and related guarantees are unsecured and are effectively subordinated, and the subsidiary guarantees are contractually subordinated, to our secured indebtedness, including our senior secured credit facility.

        The notes and related guarantees are not secured by any of our assets and therefore are effectively subordinated to the claims of our secured debt holders to the extent of the value of the assets securing our secured indebtedness. Our obligations under our senior secured credit facility are secured by, among other things, first priority and second priority security interests in the assets of Parent, Issuer and each of the Issuer's existing and future wholly owned material subsidiaries (excluding broker-dealer subsidiaries, foreign subsidiaries and domestic subsidiaries whose only assets are equity interests in foreign subsidiaries), subject to certain exceptions. In addition, the subsidiary guarantees are contractually subordinated to any secured indebtedness of the respective subsidiary guarantor, including the borrowings under our senior secured credit facility. See "Description of Certain Other Indebtedness" and "Description of Notes."

        If we become insolvent or are liquidated, or if payment under our senior secured credit facility is accelerated, the lenders under our senior secured credit facility will be entitled to exercise the remedies available to a secured lender under applicable law (in addition to any remedies that may be available under documents pertaining to our senior secured credit facility). Moreover, we may incur additional senior secured indebtedness, the holders of which will also be entitled to the remedies available to a secured lender. In the event of any distribution or payment of our assets in any foreclosure, dissolution, winding-up, liquidation, reorganization, or other bankruptcy proceeding, we cannot assure you that there will be sufficient assets to pay amounts due on the notes. As a result, holders of the notes may receive less, ratably, than holders of secured indebtedness.

        As of December 31, 2013, we had $2.6 billion of senior secured indebtedness outstanding, representing first- and second-lien term loans under our senior secured credit facility, which would have ranked effectively senior to the exchange notes, and we had an additional $190.0 million of borrowing availability under our senior secured revolving credit facility. We will be permitted to add, in addition to the revolving credit facility, incremental facilities, subject to certain conditions being satisfied. The credit agreement governing our senior secured credit facility and the indentures governing the notes will also permit us to incur additional secured indebtedness.

The notes and related guarantees are structurally subordinated to all liabilities of our non-guarantor subsidiaries.

        The notes and related guarantees are structurally subordinated to all of the liabilities of our subsidiaries that do not guarantee the notes. In the event of a bankruptcy, liquidation or dissolution of any of our non-guarantor subsidiaries, holders of their debt, including their trade creditors, secured creditors and creditors holding indebtedness or guarantees issued by those subsidiaries, are generally entitled to payment on their claims from assets of those subsidiaries before any assets are made available for distribution to us. Although the indentures governing the notes contain limitations on the incurrence of additional indebtedness by us and our restricted subsidiaries, such limitations are subject to a number of significant exceptions. Moreover, the indentures governing the notes do not impose any limitation on the incurrence by our restricted subsidiaries of liabilities that do not constitute indebtedness under the indentures. The aggregate net operating revenues for the year ended

33


Table of Contents

December 31, 2013 of our subsidiaries that are not guaranteeing the notes were $87.5 million (excluding $120.3 million in intercompany revenue), and at December 31, 2013, those subsidiaries had total assets and total liabilities of $695 million and $25 million, respectively. See "Description of Notes—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock." See also "Description of Notes—Guarantees" and the condensed consolidating financial information included in the notes to our consolidated financial statements included herein.

Federal and state statutes may allow courts, under specific circumstances, to void the notes and related guarantees, subordinate claims in respect of the notes and related guarantees and/or require holders of the notes to return payments received from us.

        Under federal bankruptcy laws and comparable provisions of state fraudulent transfer laws, the notes and related guarantees could be voided, or claims in respect of the notes and related guarantees could be subordinated to all of our other debt, if the issuance of the notes or related guarantees was found to have been made for less than reasonable equivalent value and we, at the time we incurred the indebtedness evidenced by the notes:

    were insolvent or rendered insolvent by reason of such indebtedness;

    were engaged in, or about to engage in, a business or transaction for which our remaining assets constituted unreasonably small capital; or

    intended to incur, or believed that we would incur, debts beyond our ability to repay such debts as they mature.

        A court might also void the issuance of the notes and related guarantees without regard to the above factors, if the court found that we issued the notes or the guarantors entered into the applicable guaranty with actual intent to hinder, delay or defraud our or their respective creditors.

        A court would likely find that we or a guarantor did not receive reasonably equivalent value or fair consideration for the notes or the guarantees, respectively, if we or a guarantor did not substantially benefit directly or indirectly from the issuance of the notes. If a court were to void the issuance of the notes or the guarantees, you would no longer have a claim against us or the guarantors. Sufficient funds to repay the notes may not be available from other sources, including the remaining guarantors, if any. Moreover, the court might direct you to repay any amounts that you already received from us or the guarantors with respect to the notes or any guarantee.

        In addition, any payment by us pursuant to the notes made at a time when we were subsequently found to be insolvent could be voided and required to be returned to us or to a fund for the benefit of our creditors if such payment is made to an insider within a one-year period prior to a bankruptcy filing or within 90 days for any outside party and such payment would give the creditors more than such creditors would have received in a liquidation under Title 11 of the United States Code, as amended (the "Bankruptcy Code").

        The measures of insolvency for purposes of these fraudulent and preferential transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent or preferential transfer has occurred. Generally, however, we would be considered insolvent if:

    the sum of our debts, including contingent liabilities, were greater than the fair saleable value of all our assets;

    the present fair saleable value of our assets were less than the amount that would be required to pay our probable liability on existing debts, including contingent liabilities, as they become absolute and mature; or

    we could not pay our debts as they become due.

34


Table of Contents

        The indentures governing the notes contain a "savings clause," which limits the liability of each guarantor on its guarantee to the maximum amount that such guarantor can incur without risk that its guarantee will be subject to avoidance as a fraudulent transfer. We cannot assure you that this limitation will protect such guarantees from fraudulent transfer challenges or, if it does, that the remaining amount due and collectible under the guarantees would suffice, if necessary, to pay the notes in full when due. Furthermore, in a recent case, Official Committee of Unsecured Creditors of TOUSA, Inc. v Citicorp North America, Inc., the U.S. Bankruptcy Court in the Southern District of Florida held that a savings clause similar to the savings clause that is included in the indentures governing the notes was unenforceable. As a result, the subsidiary guarantees were found to be fraudulent conveyances. The United States Court of Appeals for the Eleventh Circuit recently affirmed the liability findings of the Bankruptcy Court without ruling directly on the enforceability of savings clauses generally. If the TOUSA decisions were followed by other courts, the risk that the guarantees would be deemed fraudulent conveyances would be significantly increased.

        In addition, although each guarantee will contain a provision intended to limit that guarantor's liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer, this provision may not be effective to protect those guarantees from being voided under fraudulent transfer law, or may reduce that guarantor's obligation to an amount that effectively makes its guarantee worthless.

        Finally, as a court of equity, the bankruptcy court may subordinate the claims in respect of the notes to other claims against us under the principle of equitable subordination, if the court determines that: (i) the holders of the notes engaged in some type of inequitable conduct; (ii) such inequitable conduct resulted in injury to our other creditors or conferred an unfair advantage upon the holder of the notes; and (iii) equitable subordination is not inconsistent with the provisions of the Bankruptcy Code.

Because each guarantor's liability under its guarantees may be reduced to zero, avoided or released under certain circumstances, holders of notes may not receive any payments from some or all of the guarantors.

        Holders of notes have the benefit of the guarantees of the guarantors. However, the guarantees by the guarantors are limited to the maximum amount that the guarantors are permitted to guarantee under applicable law. As a result, a guarantor's liability under its guarantee could be reduced to zero, depending upon the amount of other obligations of such guarantor. Further, under the circumstances discussed more fully above, a court under federal and state fraudulent conveyance and transfer statutes could void the obligations under a guarantee or further subordinate it to all other obligations of the guarantor. See "—Federal and state statutes may allow courts, under specific circumstances, to void the notes and related guarantees, subordinate claims in respect of the notes and related guarantees and/or require holders of the notes to return payments received from us." In addition, you will lose the benefit of a particular guarantee if it is released under certain circumstances described under "Description of Notes—Guarantees."

We may not be able to finance a change of control offer required by the indentures.

        Upon a change of control, as defined under the indentures governing the notes, we are required to make an offer to purchase all of the notes then outstanding at 101% of their principal amount, plus accrued and unpaid interest. The source of funds for any such purchase of the notes would be our available cash or cash generated from other sources, including borrowings, sales of assets, sales of equity or funds provided by our existing or new equityholders. We cannot assure you that sufficient funds from such sources will be available at the time of any change of control to make required purchases of notes tendered. In addition, the terms of the credit agreement governing our senior secured credit facility limit our ability to repurchase the notes and provide that certain change of control events will constitute an event of default thereunder. Our future debt agreements may contain

35


Table of Contents

similar restrictions and provisions. If the holders of the notes exercise their right to require us to repurchase all the notes upon a change of control, the financial effect of this repurchase could cause a default under our other debt, even if the change of control itself would not cause a default. Accordingly, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of our other debt and the notes or that restrictions in our senior secured credit facility and the indentures will not allow such repurchases. Our failure to offer to purchase all the notes or to purchase all validly tendered notes would be an event of default under the indentures governing the notes. Such an event of default may cause the acceleration of our other debt, including debt under our senior secured credit facility.

        Certain important corporate events, such as leveraged recapitalizations, may not, under the indentures governing the notes, constitute a "change of control" that would require us to repurchase the notes, notwithstanding the fact that such corporate events could increase the level of our indebtedness or otherwise adversely affect our capital structure, credit ratings or the value of the notes. In addition, the definition of change of control in the indentures governing the notes includes a phrase relating to the sale of "all or substantially all" of our assets. There is no precise established definition of the phrase "substantially all" under applicable law. Accordingly, the ability of a holder of notes to require us to repurchase its notes as a result of a sale of less than all our assets to another person may be uncertain. See "Description of Notes—Repurchase at the Option of Holders—Change of Control."

A lowering or withdrawal of the ratings assigned to our debt securities by rating agencies may adversely affect the market price or liquidity of the notes.

        Our debt currently has a non-investment grade rating, and there can be no assurances that any rating assigned will remain for any given period of time or that a rating will not be lowered or withdrawn entirely by a rating agency if, in that rating agency's judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant. Credit ratings are not recommendations to purchase, hold or sell the notes, and may be revised or withdrawn at any time. Additionally, credit ratings may not reflect the potential effect of risks relating to the structure or marketing of the notes. If any credit rating initially assigned to the notes is subsequently lowered or withdrawn for any reason, you may not be able to resell your notes without a substantial discount.

If the notes are rated investment grade by both Standard & Poor's and Moody's, certain covenants contained in the indentures governing the notes will be suspended, and holders of the notes will lose the protection of these covenants unless and until the notes subsequently fall back below investment grade.

        The indentures governing the notes contain certain covenants that will be suspended for so long as the notes are rated investment grade by both Standard and Poor's Ratings Services and Moody's Investors Service, Inc. These covenants restrict the Issuer's and its restricted subsidiaries' ability to, among other things:

    incur additional indebtedness or issue preferred stock;

    make distributions, prepay certain debt or make other restricted payments;

    sell capital stock or other assets;

    engage in transactions with affiliates; and

    enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to the Issuer.

        Because these restrictions will not apply when the notes are rated investment grade, we will be able to incur additional debt and consummate transactions that may impair our ability to satisfy our obligations with respect to the notes. In addition, we will not have to make certain offers to repurchase the notes.

36


Table of Contents


USE OF PROCEEDS

        We will not receive any proceeds from the issuance of the exchange notes in the exchange offers. The exchange offers are intended to satisfy our obligations under the applicable registration rights agreements that we entered into in connection with the private offerings of the outstanding notes. As consideration for issuing the exchange notes as contemplated in this prospectus, we will receive in exchange a like principal amount of outstanding notes, the terms of which are identical in all material respects to the exchange notes, except that the exchange notes will not contain terms with respect to transfer restrictions or additional interest upon a failure to fulfill certain of our obligations under the applicable registration rights agreement. The outstanding notes that are surrendered in exchange for the exchange notes will be retired and cancelled and cannot be reissued. As a result, the issuance of the exchange notes will not result in any change in our capitalization.

37


Table of Contents


CAPITALIZATION

        The following table sets forth our consolidated cash and cash equivalents and capitalization as of December 31, 2013.

        You should read this table together with "Summary—Summary Historical Financial and Other Data," "Use of Proceeds," "Selected Historical Consolidated Financial and Operating Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

        The outstanding notes that are surrendered in exchange for the exchange notes will be retired and cancelled and cannot be reissued. As a result, the issuance of the exchange notes will not result in any change in our capitalization.

 
  As of
December 31,
2013 (dollars
in millions)
(unaudited)
 

Cash and cash equivalents(1)

  $ 324.7  
       
       

Long-term debt (including current portion):

       

Senior secured credit facility(2):

       

Revolving credit facility due 2017

  $  

First-lien term loans due 2017

    2,561.3  

Second-lien term loans due 2019

    500.0  

5.5% senior notes due 2015(2)

    300.0  

9.125% senior notes due 2017(2)

    500.0  

9.5% senior notes due 2020(2)

    645.0  

Unamortized discount and debt issuance costs(3)

    (23.6 )
       

Total debt (including current portion)(4)

    4,482.7  
       

Total Nuveen Investments shareholders' equity(4)

    452.4  
       

Total capitalization

  $ 4,935.1  
       
       

(1)
Excludes approximately $430.5 million of cash and cash equivalents of consolidated variable interest entities. We are required to consolidate in our financial statements (a) Symphony CLO V, Ltd., in which we hold no ownership interest, because MDP is considered the primary beneficiary of Symphony CLO V, (b) eleven additional collateralized loan and debt obligations for which Symphony acts as collateral manager and (c) certain funds managed by Gresham that qualify as variable interest entities. See Notes 1 and 3 of the notes to our consolidated financial statements for the year ended December 31, 2013 included elsewhere in this prospectus. Includes approximately $38.5 million of cash and cash equivalents maintained at our broker dealer subsidiary, Nuveen Securities, LLC, to address potential liquidity needs and to comply with applicable regulations. Includes approximately $14.5 million in cash and cash equivalents maintained at Gresham that is attributable to the non-controlling shareholders.

(2)
Reflects the principal amount of the loans or notes, as applicable.

(3)
Reflects the net unamortized discounts and debt issuance costs for our outstanding indebtedness.

(4)
Excludes the impact of consolidated variable interest entities.

38


Table of Contents


SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA

        The following tables set forth selected historical consolidated financial and operating data as of the dates and for the periods indicated. The historical consolidated statement of operations data presented below for the years ended December 31, 2013, 2012 and 2011 and the historical consolidated balance sheet data as of December 31, 2013 and 2012 have been derived from, and should be read together with, our audited consolidated financial statements and the related notes thereto included elsewhere in this prospectus, which statements have been audited by KPMG LLP, whose report on our audited consolidated financial statements is included in this prospectus. The historical consolidated statement of operations data presented below for the years ended December 31, 2010 and 2009 and the historical consolidated balance sheet data as of December 31, 2011, 2010 and 2009 have been derived from our audited consolidated financial statements not included in this prospectus. The historical results presented below are not necessarily indicative of the results to be expected for any future period and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

 
  For the Year Ended December 31,  
 
  2009   2010   2011   2012   2013  

Statement of Operations Data (in thousands):

                               

Operating Revenues:

                               

Investment advisory fees from assets under management

  $ 608,655   $ 733,518   $ 973,900   $ 991,729   $ 977,414  

Income from CLOs/CDOs

    11,661     13,291     19,255     33,398     50,830  

Product distribution

    16,127     20,519     20,217     21,678     20,625  

Performance fees/other revenue

    41,880     24,821     15,839     57,168     27,476  
                       

Total operating revenues

    678,323     792,149     1,029,211     1,103,973     1,076,345  

Operating Expenses:

                               

Compensation and benefits

    273,567     329,712     432,830     472,854     468,914  

Advertising and promotional costs

    5,898     9,030     12,881     15,134     13,643  

Intangible asset impairment

                586,715      

All other operating expenses

    248,590     270,311     303,033     344,644     279,941  
                       

Total operating expenses

    528,055     609,053     748,744     1,419,347     762,498  

Other Operating—Contingent Consideration

                (29,300 )   87,200  

Other Income/(Expense)

    16,540     42,445     29,975     (120,051 )   (96,791 )

Net Interest Expense

    (306,642 )   (309,552 )   (320,416 )   (340,270 )   (283,759 )

Consolidated VIEs and funds, net

    135,273     109,787     (16,472 )   (72,921 )   11,862  

Income/(Loss) Before Taxes

    (4,561 )   25,776     (26,446 )   (877,916 )   32,359  

Income Tax Expense/(Benefit)

    (40,133 )   (25,733 )   (6,291 )   (240,730 )   (42,385 )
                       

Net Income/(Loss)

    35,572     51,509     (20,155 )   (637,186 )   74,744  
                       

Less: Net Income/(Loss) attributable Noncontrolling Interests               

    1,653     87,426     (7,171 )   (66,188 )   29,516  

Net Income/(Loss) attributable to Nuveen Investments

  $ 33,919   $ (35,917 ) $ (12,984 ) $ (570,998 ) $ 45,228  
                       
                       

Balance Sheet Data, at period end (in thousands):

                               

Cash and cash equivalents(1)

  $ 290,085   $ 127,714   $ 212,258   $ 290,289   $ 324,717  

Total assets(1)

    6,249,049     5,992,041     6,863,251     6,263,226     6,298,190  

Total debt, including current portion(1)(2)

    3,984,831     3,694,588     4,034,366     4,419,990     4,482,668  

Total Nuveen Investments' shareholders' equity(1)

    968,121     1,005,512     980,166     396,107     452,405  

39


Table of Contents


 
  For the Year Ended
December 31,
 
 
  2009   2010   2011   2012   2013  

Operating Data (in millions):

                               

Net Assets Under Management, at period end

                               

Retail Advisory

  $ 59,851   $ 85,464   $ 84,096   $ 86,469   $ 87,692  

Institutional

    33,618     58,022     72,665     60,707     62,229  

Structured Products

    51,327     53,316     63,335     71,379     70,583  
                       

Total

  $ 144,796   $ 196,802   $ 220,096   $ 218,555   $ 220,504  
                       
                       

Net Investment Product Flows

                               

Retail Advisory

  $ 1,473   $ 2,621   $ 255   $ (2,433 ) $ (2,305 )

Institutional

    156     8,882     12,097     (16,752 )   (9,172 )

Structured Products

    (457 )   2,056     1,482     4,943     2,693  
                       

Total

  $ 1,172   $ 13,559   $ 13,834   $ (14,242 ) $ (8,784 )
                       
                       

 

 
  For the Year Ended
December 31,
 
 
  2009   2010   2011   2012   2013  

Other Financial Data (dollars in thousands):

                               

Depreciation and amortization

  $ 85,517   $ 86,989   $ 93,332   $ 95,641   $ 69,309  

Cash interest expense(3)

    298,676     295,679     302,647     329,407     279,566  

Capital expenditures

    10,815     17,674     49,791     44,176     18,712  

Cash flow provided by (used in):

                               

Operating activities

    (64,043 )   28,289     180,952     60,148     145,624  

Financing activities

    (38,608 )   (126,197 )   288,477     239,648     (66,279 )

Investing activities(1)

    (58,977 )   (64,461 )   (395,170 )   (221,721 )   (45,026 )

Ratio of adjusted earnings to fixed charges(4)

    NM     NM     NM     NM     0.99  


NM—Not
meaningful.

(1)
Excludes assets and liabilities of consolidated variable interest entities. We are required to consolidate in our financial statements (a) Symphony CLO V, Ltd., in which we hold no ownership interest because MDP is considered the primary beneficiary of Symphony CLO V, (b) other collateralized loan and debt obligations for which Symphony acts as collateral manager and (c) certain funds managed by Gresham. See Notes 1 and 3 of the notes to our consolidated financial statements for the year ended December 31, 2013 included elsewhere in this prospectus.

(2)
Includes net remaining unamortized discount and debt issuance costs.

(3)
Excludes cash interest expense attributable to consolidated variable interest entities.

(4)
The ratio of adjusted earnings to fixed charges is computed by dividing (1) the sum of income from continuing operations before income taxes and fixed charges attributable to Nuveen Investments less net income/(loss) attributable to noncontrolling interests by (2) total fixed charges. For purposes of computing this ratio, fixed charges consist of interest expense plus the portion of rental expense deemed to represent interest. For the years ended December 31, 2009, December 31, 2010, December 31, 2011, December 31, 2012, and December 31, 2013, earnings were insufficient to cover fixed charges by $141.5 million, $86.6 million, $11.7 million, $834.9 million, and $1.9 million, respectively.

40


Table of Contents


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

        The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our consolidated financial condition and results of operations. This discussion should be read together with our consolidated financial statements and the related notes thereto included elsewhere in this prospectus. This discussion contains forward-looking statements about our business and operations. Our actual results may differ materially from those contained in forward-looking statements because of numerous risks and uncertainties, including, but not limited to, those described under "Risk Factors" and elsewhere in this prospectus. See "Cautionary Note Regarding Forward-Looking Statements."

Description of the Business

        Our principal business is providing investment management and related services to retail and institutional investors. We market a wide range of specialized investment solutions which provide investors access to the capabilities of our boutique investment management affiliates: NAM, Symphony, NWQ, Santa Barbara, Tradewinds, Winslow Capital and Gresham. We offer investment management capabilities across a diversified set of asset classes and investment strategies through our investment management affiliates, including municipal bond, investment grade, global and high-yield bond, floating-rate bank loan, preferred security, growth equity, value equity, global and international equity, equity income, core equity, equity index, quantitative and enhanced equity, asset allocation, balanced strategies, real asset and commodity. Our investment management affiliates are supported by our scaled shared services platform, through which we provide assistance in distribution, marketing, product development and operations.

        We provide investment management services through the investment products that we develop, market and distribute, including mutual funds, closed-end funds, managed accounts, CLO/CDOs, commodity exchange-traded products, private funds and UCITS funds. We also provide investment management services on a direct basis or through sub-advisory relationships. Most of our investment management capabilities are offered in multiple product wrappers in order to provide customized investment solutions for investors. Although we offer a wide range of investment products and services, we operate in one business segment.

        We distribute our investment products and services to retail and institutional investors primarily through intermediaries, including national and regional broker-dealers, independent broker-dealers, commercial banks and trust companies, insurance companies, consultants and investment advisors. We also distribute our investment products and services directly to institutional investors, including financial institutions and other corporate clients, pension and retirement plans, governmental entities, charities, endowments, foundations and family offices.

        We derive a substantial portion of our revenue from investment advisory fees, which are recognized as services are performed. These fees are directly related to the market value of the assets we manage. Advisory fee revenues generally will increase with a rise in the level of our assets under management. Assets under management rise through sales of our investment products and services, through increases in the value of the investment portfolios we manage and as a result of reinvestment of distributions from funds and accounts. Assets under management may also increase as a result of an acquisition. Fee income generally will decline when our assets under management decline, as would occur when the values of the investment portfolios we manage decrease or when managed account withdrawals, mutual fund redemptions and/or closed-end fund deleveragings exceed gross sales and reinvestments.

        In addition to investment advisory fees, we have two other main sources of operating revenue: performance fees and distribution and underwriting revenue. Performance fees are earned when

41


Table of Contents

investment performance on certain institutional accounts and private funds exceeds a contractual threshold. These fees are recognized only at the performance measurement date contained in the individual account or fund management agreement. Distribution revenue is earned when certain investment products are sold to the public through financial advisors. Generally, distribution revenue will rise and fall with the level of our sales of mutual fund products and is offset by distribution expenses we incur in the form of sales commissions paid to financial intermediaries. Underwriting fees are earned on the offerings of our closed-end funds. The level of underwriting fees earned in any given year will fluctuate depending on the number of initial and secondary offerings, the size of the offerings and the extent to which we participate as a member of the syndicate group underwriting the offerings.

        Sales of our investment products and services, and our profitability, are directly affected by many variables, including investor preferences for equity, fixed-income or other investments, the availability and attractiveness of competing products, market performance, continued access to distribution channels, changes in interest rates, inflation, and income tax rates and laws. See "Risk Factors" for a description of certain factors that could materially adversely affect our business, financial condition, operating results or non-operating results.

Recent Acquisitions

Acquisition of Gresham

        On December 31, 2011, we completed the acquisition of a 60% stake (the "Gresham Transaction") in both Gresham Investment Management LLC and Gresham Asset Management LLC ("Gresham"). Gresham specializes in the management of diversified commodity investment portfolios using commodity futures and options. We have the option to purchase an additional 5%, 5% and 10% of the equity interests of Gresham upon the third, fourth and fifth anniversaries of the closing of the Gresham Transaction, respectively.

Strategic Combination with FAF Advisors

        On December 31, 2010, we completed the acquisition of the long-term asset management business of U.S. Bank National Association's FAF Advisors, including the assets of FAF Advisors used in providing investment advisory services to the long mutual funds marketed under the First American funds name (the "FAF Transaction").

42


Table of Contents

Summary of Operating Results

        The table presented below highlights the results of our operations for the three years ended December 31, 2013:

 
  Year Ended December 31,  
 
  2013   2012   2011  
 
  (dollars in millions)
 

Net flows of investment products

  $ (8,784 ) $ (14,242 ) $ 13,834  

Assets under management(1)

    220,504     218,555     220,096  

Operating revenues

    1,076.3     1,104.0     1,029.2  

Operating expenses

    762.5     1,419.3     748.7  

Operating other—contingent consideration

    87.2     (29.3 )    

Other income/(expense)

    (96.8 )   (120.1 )   30.0  

Net interest expense

    (283.8 )   (340.3 )   (320.4 )

Consolidated VIEs and funds, net

    11.9     (72.9 )   (16.5 )

Income tax expense/(benefit)

    (42.4 )   (240.7 )   (6.3 )

Noncontrolling interest net income/(loss)

    29.5     (66.2 )   (7.2 )

Net income/(loss) attributable to Nuveen Investments

    45.2     (571.0 )   (13.0 )

(1)
At period end.

Results of Operations

        The following tables and discussion and analysis contain important information that should be helpful in evaluating our results of operations and financial condition, and should be read in conjunction with the accompanying 2013 consolidated financial statements and related notes.

        We present certain information below regarding our results of operations in three categories of investment products and services: retail advisory, institutional and structured products. Our retail advisory category represents Nuveen-sponsored open-end funds and retail managed accounts. Our institutional category represents institutional managed accounts, sub-advised mandates and Nuveen-sponsored UCITS funds. Our structured products category represents Nuveen-sponsored closed-end funds, CLO/CDOs, commodity exchange-traded products and private funds.

        We also present certain information regarding our assets under management in three categories of investment strategy: credit based strategies, equity based strategies, and multi-strategy and alternative assets. Our credit based strategies include national and state specific municipal bond, investment grade, global and high-yield bond, floating-rate bank loan, preferred security and other taxable fixed-income strategies. Our equity based strategies include growth equity, value equity, global and international equity, equity income, core equity and equity index strategies. Our multi-strategy and alternative assets strategies include quantitative and enhanced equity, asset allocation, balanced strategies, real asset and commodity strategies.

43


Table of Contents

Assets Under Management

        The following table provides information regarding the composition of our assets under management for the three years ended December 31, 2013:

 
  Year Ended
December 31,
 
 
  2013   2012   2011  
 
  (dollars in millions)
 

Product

                   

Retail Advisory

  $ 87,692   $ 86,469   $ 84,096  

Institutional

    62,229     60,707     72,665  

Structured Products

    70,583     71,379     63,335  
               

Total

  $ 220,504   $ 218,555   $ 220,096  
               
               

 

 
  Year Ended
December 31,
 
 
  2013   2012   2011  
 
  (dollars in millions)
 

Strategy

                   

Credit Based Strategies

  $ 118,536   $ 120,910   $ 104,037  

Equity Based Strategies

    77,099     72,474     95,817  

Multi-Strategy and Alternative Assets

    24,869     25,171     20,242  
               

Total

  $ 220,504   $ 218,555   $ 220,096  
               
               

        Changes in the level of our assets under management are primarily a result of two factors: (1) the market value of the assets held in the investment portfolios we manage; and (2) our investment product net flows, which represents sales/reinvestments (inflows) minus redemptions (outflows).

        Changes in asset mix across both product and strategy have a direct impact on our operating income. Asset mix impacts total revenue due to the differences in fee rates earned on each product and strategy. Equity based strategy and multi-strategy and alternative asset products generally have higher management fee rates than credit based strategy products. Likewise, fee rates on structured products are generally higher than fee rates on retail advisory and institutional products.

        The following table provides information regarding our assets under management as a percent of total assets for the three years ended December 31, 2013:

 
  Year Ended
December 31,
 
 
  2013   2012   2011  

Product

                   

Retail Advisory

    39.8 %   39.5 %   38.2 %

Institutional

    28.2 %   27.8 %   33.0 %

Structured Products

    32.0 %   32.7 %   28.8 %

 

 
  Year Ended
December 31,
 
 
  2013   2012   2011  

Strategy

                   

Credit Based Strategies

    53.7 %   55.3 %   47.3 %

Equity Based Strategies

    35.0 %   33.2 %   43.5 %

Multi-Strategy and Alternative Assets

    11.3 %   11.5 %   9.2 %

44


Table of Contents

        Our asset mix by product remained relatively stable during 2013. Within both retail advisory and institutional products, net outflows were offset by market appreciation, while within structured products, net inflows were offset by market depreciation. As a result, total asset levels remained relatively flat year over year. During 2012, we experienced a shift in our asset mix by product, away from institutional and into both retail advisory and structured products. This shift was largely the result of significant net outflows experienced on our institutional global equity products following the departure in March 2012 of the Co-President and Chief Investment Officer of our subsidiary, Tradewinds.

        During the first six months of 2013, our asset mix by strategy shifted toward credit based strategies as a result of net outflows in our equity based strategies and strong demand for municipal and fixed income products. This shift was reversed in the last six months of 2013, primarily as a result of strong equity market appreciation and outflows on municipal bond products. As a result, our asset mix by strategy at December 31, 2013 was fairly unchanged from the beginning of the year, with only a slight shift from credit based strategies to equity based strategies. During 2012, we experienced a significant shift in the composition of our assets by strategy away from equity based and into credit based strategies, driven largely by outflows on our global equity products following the departure in March 2012 of the Co-President and Chief Investment Officer of Tradewinds.

Net Flows

        The following table provides information regarding the composition of our net flows for the three years ended December 31, 2013:

 
  Year Ended
December 31,
 
 
  2013   2012   2011  
 
  (dollars in millions)
 

Product

                   

Retail Advisory

  $ (2,305 ) $ (2,433 ) $ 255  

Institutional

    (9,172 )   (16,752 )   12,097  

Structured Products

    2,693     4,943     1,482  
               

Total

  $ (8,784 ) $ (14,242 ) $ 13,834  
               
               

Strategy

                   

Credit Based Strategies

  $ 4,003   $ 10,760   $ 1,186  

Equity Based Strategies

    (13,794 )   (29,105 )   12,835  

Multi-Strategy and Alternative Assets

    1,007     4,103     (187 )
               

Total

  $ (8,784 ) $ (14,242 ) $ 13,834  
               
               

        For the year ended December 31, 2013, we experienced net outflows of $8.8 billion, a year-over-year improvement of $5.4 billion, when compared to $14.2 billion of net outflows during 2012. Structured product net inflows of $2.7 billion were driven by $1.7 billion of closed-end fund and $1.0 billion of CLO/CDO net inflows. Net inflows into structured products were more than offset by net outflows in our retail advisory and institutional products. Institutional product net outflows of $9.2 billion were the result of $11.5 billion of net outflows on equity based strategies, offset by $1.3 billion of net inflows on credit based strategies and $1.0 billion of net inflows on our multi-strategy and alternative asset strategies. Outflows on our retail advisory products of $2.3 billion were driven mainly by outflows on our equity based strategies as a result of management changes at Winslow and continued outflows as a result of the management changes at Tradewinds.

45


Table of Contents

        For the year ended December 31, 2012, we experienced net outflows of $14.2 billion, a year-over-year decline of $28.1 billion, when compared to $13.8 billion of net inflows during 2011. As mentioned previously, this was largely due to the departure of the Co-President and Chief Investment Officer of Tradewinds. Partially offsetting the equity based strategy outflows, was a significant increase in flows in our municipal credit based strategies, predominantly on our retail advisory products. Within the multi-strategy and alternative assets category, commodity strategy flows accounted for $2.9 billion of the $4.3 billion increase in net flows year-over-year. Approximately $1.9 billion of the commodity strategy flows were in institutional products while the remaining $1.0 billion were in structured products.

46


Table of Contents

        The following table shows the components of the change in our assets under management by product during the three years ended December 31, 2013:

 
  Year Ended December 31,  
 
  2013   2012   2011  
 
  (dollars in millions)
 

Retail Advisory

                   

Beginning Assets Under Management

  $ 86,469   $ 84,096   $ 85,464  

Gross Sales/Reinvestments

    27,769     26,768     26,257  

Reallocation of Assets

    304     (44 )   139  

Redemptions

    (30,378 )   (29,157 )   (26,141 )
               

Net Flows

    (2,305 )   (2,433 )   255  

Acquisitions

             

Appreciation/(Depreciation)

    3,528     4,806     (1,623 )
               

Ending Assets Under Management

  $ 87,692   $ 86,469   $ 84,096  
               

Institutional

                   

Beginning Assets Under Management

  $ 60,707   $ 72,665   $ 58,022  

Gross Sales/Reinvestments

    11,048     13,842     26,391  

Reallocation of Assets

    (304 )   412     (139 )

Redemptions

    (19,916 )   (31,006 )   (14,155 )
               

Net Flows

    (9,172 )   (16,752 )   12,097  

Acquisitions

            5,373  

Appreciation/(Depreciation)

    10,694     4,794     (2,827 )
               

Ending Assets Under Management

  $ 62,229   $ 60,707   $ 72,665  
               

Structured Products

                   

Beginning Assets Under Management

  $ 71,379   $ 63,335   $ 53,316  

Gross Sales/Reinvestments

    5,496     6,663     2,396  

Reallocation of Assets

        (368 )    

Redemptions

    (2,803 )   (1,352 )   (914 )
               

Net Flows

    2,693     4,943     1,482  

Acquisitions

            7,429  

Appreciation/(Depreciation)

    (3,489 )   3,101     1,108  
               

Ending Assets Under Management

  $ 70,583   $ 71,379   $ 63,335  
               

Total

                   

Beginning Assets Under Management

  $ 218,555   $ 220,096   $ 196,802  

Gross Sales/Reinvestments

    44,313     47,273     55,044  

Reallocation of Assets

             

Redemptions

    (53,097 )   (61,515 )   (41,210 )
               

Net Flows

    (8,784 )   (14,242 )   13,834  

Acquisitions

            12,802  

Appreciation/(Depreciation)

    10,733     12,701     (3,342 )
               

Ending Assets Under Management

  $ 220,504   $ 218,555   $ 220,096  
               

47


Table of Contents

        The following table shows the components of the change in our assets under management by strategy during the three years ended December 31, 2013:

 
  Year Ended December 31,  
 
  2013   2012   2011  
 
  (dollars in millions)
 

Credit Based Strategies

                   

Beginning Assets Under Management

  $ 120,910   $ 104,037   $ 98,356  

Gross Sales/Reinvestments

    24,954     22,432     14,388  

Reallocation of Assets

        404      

Redemptions

    (20,951 )   (12,076 )   (13,202 )
               

Net Flows

    4,003     10,760     1,186  

Acquisitions

             

Appreciation/(Depreciation)

    (6,377 )   6,113     4,495  
               

Ending Assets Under Management

  $ 118,536   $ 120,910   $ 104,037  
               

Equity Based Strategies

                   

Beginning Assets Under Management

  $ 72,474   $ 95,817   $ 90,907  

Gross Sales/Reinvestments

    12,873     17,512     38,479  

Reallocation of Assets

    (17 )   (1,020 )    

Redemptions

    (26,650 )   (45,597 )   (25,644 )
               

Net Flows

    (13,794 )   (29,105 )   12,835  

Acquisitions

             

Appreciation/(Depreciation)

    18,419     5,762     (7,925 )
               

Ending Assets Under Management

  $ 77,099   $ 72,474   $ 95,817  
               

Multi-Strategy and Alternative Assets

                   

Beginning Assets Under Management

  $ 25,171   $ 20,242   $ 7,539  

Gross Sales/Reinvestments

    6,486     7,329     2,178  

Reallocation of Assets

    17     616      

Redemptions

    (5,496 )   (3,842 )   (2,365 )
               

Net Flows

    1,007     4,103     (187 )

Acquisitions

            12,802  

Appreciation/(Depreciation)

    (1,309 )   826     88  
               

Ending Assets Under Management

  $ 24,869   $ 25,171   $ 20,242  
               

Total

                   

Beginning Assets Under Management

  $ 218,555   $ 220,096   $ 196,802  

Gross Sales/Reinvestments

    44,313     47,273     55,045  

Reallocation of Assets

             

Redemptions

    (53,097 )   (61,515 )   (41,211 )
               

Net Flows

    (8,784 )   (14,242 )   13,834  

Acquisitions

            12,802  

Appreciation/(Depreciation)

    10,733     12,701     (3,342 )
               

Ending Assets Under Management

  $ 220,504   $ 218,555   $ 220,096  
               

48


Table of Contents

Investment Advisory Fees

        The following table shows investment advisory fee revenue, net of sub-advisory fees, fee waivers and expense reimbursements, for the three years ended December 31, 2013:

 
  Year Ended December 31,  
 
  2013   2012   2011  
 
  (dollars in thousands)
 

Retail Advisory

  $ 390,278   $ 382,157   $ 405,360  

Institutional

    210,758     254,085     260,247  

Structured Products

    376,378     355,487     308,293  
               

Total

  $ 977,414   $ 991,729   $ 973,900  
               
               

        Advisory fees of $977.4 million for the year ended December 31, 2013 were fairly consistent with the $991.7 million in advisory fees in 2012. Advisory fees on retail advisory products increased 2%. While assets under management on institutional products increased approximately 3% during the year, advisory fees on these same products declined 17% year over year. This decline was largely driven by the carry over impact of the net outflows in institutional products we experienced in 2012. Advisory fees on structured products increased 6% for the year, despite a slight decline in assets under management on these products. This was largely the result of the carryover impact of the net inflows in structured products we experienced in 2012.

        Advisory fees of $991.7 million for the year ended December 31, 2012 increased $17.8 million, or 2%, from 2011. Advisory fees declined on retail advisory products as a result of the overall decline in net assets experienced during the year. Structured products advisory fees increased as a result of an increase in assets under management. Institutional and structured products advisory fees were favorably impacted by the inclusion of Gresham advisory fees in 2012.

Income from CLOs/CDOs

        Income from consolidated CLOs/CDOs represents the retained income earned by Nuveen Investments in connection with the consolidated CLOs/CDOs attributed to the collateral management agreement with the CLOs/CDOs.

 
  Year Ended December 31,  
 
  2013   2012   2011  
 
  (dollars in thousands)
 

Advisory based income

  $ 27,513   $ 21,668   $ 16,008  

Performance based/other income

    23,317     11,730     3,247  
               

Total

  $ 50,830   $ 33,398   $ 19,255  
               
               

        Income from CLOs/CDOs increased $17.4 million during the year ended December 31, 2013 compared to the prior year primarily as a result of higher performance based income.

49


Table of Contents

Product Distribution Revenue

        The following table shows product distribution revenue for the three years ended December 31, 2013:

 
  Year Ended December 31,  
 
  2013   2012   2011  
 
  (dollars in thousands)
 

Retail Advisory

  $ 19,859   $ 19,287   $ 19,528  

Structured Products

    766     2,391     689  
               

Total

  $ 20,625   $ 21,678   $ 20,217  
               
               

        For the year ended December 31, 2013, product distribution revenue declined $1.1 million, or 5%, from 2012. This decline was the result of a decline in underwriting revenue earned on structured products. Underwriting revenue declined as a result of a reduction in the number and size of closed-end fund offerings during 2013, when compared to 2012. Distribution revenue on retail advisory products increased as a result of an increase in mutual fund sales.

        For the year ended December 31, 2012, product distribution revenue increased $1.5 million, or 7%, from 2011. This increase was mainly attributable to higher closed-end fund underwriting revenue, which resulted from an increase in the number of closed-end fund offerings during 2012. Mutual fund distribution revenue declined $0.2 million for the year ended December 31, 2012 despite an increase in mutual fund sales in 2012. Mutual fund distribution revenue declined as a result of our decision to no longer offer the B-share mutual fund share class. There is a corresponding decline in distribution expense (included in operating expenses) on B-shares related to this decline in revenue.

Performance Fees/Other Revenue

        Performance fees/other revenue consists of performance fees earned on institutional and private fund assets managed, consulting revenue, and model/research fees.

        Performance fees/other revenue for 2013 were $27.5 million, a decline of $29.7 million from the $57.2 million earned in 2012. This decline was mainly attributable to a decline in performance fees earned on commodity based private funds and managed accounts managed by Gresham.

        Performance fees/other revenue for 2012 were $57.2 million, an increase of $41.3 million from 2011. Included in 2012 performance fees/other revenue are $40.8 million of performance fees from Gresham, which was acquired on December 31, 2011. Not including Gresham, 2012 performance fees/other revenue increased $0.6 million, or 4%, from 2011, mainly as a result of an increase in fees on alternative products managed by Symphony.

50


Table of Contents

Operating Expenses

        The following table shows operating expenses for the three years ended December 31, 2013:

 
  Year Ended December 31,  
 
  2013   2012   2011  
 
  (dollars in thousands)
 

Compensation and Benefits

  $ 468,914   $ 472,854   $ 432,830  

Severance

    21,309     23,075     4,520  

Advertising and Promotional Costs

    13,643     15,134     12,881  

Occupancy and Equipment Costs

    49,477     44,418     45,392  

Amortization of Intangible Assets

    39,912     69,271     72,316  

Travel and Entertainment

    17,845     19,288     16,965  

Distribution Expense

    57,398     55,841     50,893  

Outside and Professional Services

    52,329     60,750     67,745  

Intangible Asset Impairment

        586,715      

Other Operating Expenses

    41,671     72,001     45,202  
               

Total

  $ 762,498   $ 1,419,347   $ 748,744  
               
               

Compensation and Benefits

        During 2013, compensation and related benefits declined $3.9 million, or 1%. This decline was due mainly to reductions in compensation expense as a result of reductions late in 2012 and during 2013.

        During 2012, compensation and related benefits increased $40.0 million, or 9%. This increase was largely the result of headcount additions and increased compensation expense relating to the Gresham Transaction. Compensation and related benefits expense for 2012 also increased as a result of the creation of new long-term incentive programs during the year.

Severance

        Severance expense in both 2013 and 2012 was the result of internal restructurings.

Advertising and Promotional Costs

        During 2013, advertising and promotional costs declined $1.5 million, or 10%, mainly as a result of a decline in advertising spending.

        During 2012, advertising and promotional costs increased $2.3 million, or 18%, mainly as a result of increased advertising and promotional costs following the Gresham Transaction.

Occupancy and Equipment Costs

        During 2013, occupancy and equipment costs increased $5.1 million primarily as a result of a $3.1 million increase in the amortization of computer software. The remaining cause of increased occupancy and equipment costs relates to gains/losses on subleased space, space attributable to a portion of our leased space in Los Angeles, California. During 2012, we recorded a $1.0 million expense reduction when space that had previously been vacated was subleased. This resulted in a year-over-year increase in expense of $2.8 million. These increases were partially offset by a decline in repairs and maintenance.

        During 2012, occupancy and equipment costs declined $1.0 million. This overall decline is the net result of a $7.0 million improvement in gain/loss on the disposal of leaseholds and fixed assets, offset by a $5.4 million increase in depreciation and a $0.5 million increase in rent and electricity. During

51


Table of Contents

2011, we recorded a $5.9 million loss attributable to the closing of a portion of our leased space in Los Angeles, California. During 2012, we recorded a partial recovery of that loss when a portion of the space was sub-leased. This resulted in the $7.0 million year-over-year improvement. The increase in depreciation expense is the result of capital spending related to integration activities following the FAF Transaction. This integration was performed over a span of approximately two years. The increase in rent and electricity is the result of increased expense following the Gresham Transaction.

Amortization of Intangible Assets

        Amortization expense for intangible assets declined $29.4 million during 2013. This decline was the result of the $586.7 million impairment charge taken during the second quarter of 2012. The impairment charge lowered amortizable intangible assets and correspondingly decreased amortization expense.

        During 2012, amortization expense for intangible assets declined $3.0 million. This decline primarily was the combined result of our recording $23.2 million of amortization expense during 2012 for intangible assets resulting from the Gresham Transaction, offset by a $26.2 million decline in amortization expense resulting from the $586.7 million impairment charge on intangible assets taken during the second quarter of 2012.

Travel and Entertainment

        During 2013, travel and entertainment expenses declined $1.4 million, primarily as a result of reductions in travel related to integration activities and a reduction in internal meeting expense due to timing of our national sales meetings.

        During 2012, travel and entertainment expenses increased $2.3 million primarily as a result of increased expense following the Gresham Transaction.

Distribution Expense

        During 2013, distribution costs increased $1.6 million, or 3%, mainly as a result of an increase in mutual fund assets.

        During 2012, distribution costs increased $4.9 million, or 10%, mainly as a result of an increase in mutual fund assets.

Outside and Professional Services

        During 2013, outside and professional services expense declined $8.4 million, or 14%. This decrease was driven by declines in legal fees, consulting fees and fees paid to outside service providers.

        During 2012, outside and professional services expense declined $7.0 million, or 10%. This decrease was driven by non-recurring consulting and legal fees incurred in the prior year.

Intangible Asset Impairment

        As a result of outflows in our assets under management during the first half of 2012, we identified $586.7 million of non-cash intangible asset impairment as of June 30, 2012. The impairment was the result of goodwill and intangible asset valuation reviews triggered by outflows in our managed account reporting unit. For additional information, refer to Note 1, "Basis of Presentation and Summary of Significant Accounting Policies—Goodwill and Intangibles: 2012 Impairment" to the accompanying December 31, 2013 consolidated financial statements.

52


Table of Contents

All Other Operating Expenses

        During 2013, all other operating expenses, including structuring fees, recruiting, fund organization costs, trade errors and other expenses, declined $30.3 million. Approximately $28.7 million of the decline was due to declines in structuring and syndication fees on new closed-end fund offerings.

        During 2012, all other operating expenses, including structuring fees, recruiting, fund organization costs, trade errors and other expenses, increased $26.8 million. Approximately $26.3 million of the increase was due to increased structuring and syndication fees on new closed-end fund offerings.

Operating Other: Contingent Consideration

        Contingent consideration represents changes in the estimated value of the Gresham contingent consideration. During 2013, we recorded a gain of $87.2 million. During 2012, we recorded expense of $29.3 million. The decline in the fair market value of the contingent consideration during 2013 was due mainly to the recent decline in the commodity markets and subsequently lower assets under management, as well as a decline in performance fees. This resulted in lower Gresham EBITDA, upon which the contingent consideration is based, relative to the projections at the end of the prior year.

Other Income/(Expense)

        Other income/(expense) includes realized gains and losses on investments, transaction costs, loss on debt transactions and miscellaneous income/(expense), including gain or loss on the disposal of property.

        The following is a summary of other income/(expense) for the three years ended December 31, 2013:

 
  Year Ended December 31,  
 
  2013   2012   2011  
 
  (dollars in thousands)
 

Gains/(Losses) on Investments

  $ 7,605   $ 22,583   $ 35,620  

Transaction Costs

    (261 )   890     (8,535 )

Loss on Debt Transactions

    (103,726 )   (143,274 )    

Miscellaneous Income/(Expense)

    (409 )   (250 )   2,890  
               

Total

  $ (96,791 ) $ (120,051 ) $ 29,975  
               
               

        Other income/(expense) increased $23.3 million during 2013, primarily as a result of lower losses on debt transactions, which were partially offset by lower gains on investments. Gains on investments during 2013 resulted from realized gains on our seed capital investments. During 2012, gains on investments also included $17.4 million of gains resulting from the change in fair value of interest rate swaps terminated in November 2012. Included in the loss on debt transactions for 2013 are $35.6 million in call premiums that we paid in connection with the refinancing of loans under our senior secured credit facility and a $68.0 million write-off of the remaining unamortized discount and debt issuance costs related to such loans. These debt transactions are discussed further in "—Capital Resources, Liquidity and Financial Condition—Debt" below.

        During 2012, other income/(expense) declined $150.0 million, primarily driven by the $143.3 million loss we recorded for the debt transactions further discussed in "—Capital Resources, Liquidity and Financial Condition—Debt" below. Included in the $143.3 million loss on debt transactions are a $30.0 million call premium and $52.5 million of accelerated expense related to the then-remaining unamortized costs associated with the February 29, 2012 debt transactions, as well as $39.1 million in tender premium, $3.7 million in call premium, consent fees and amendment fees, and $17.6 million of accelerated expense relating to the then-remaining unamortized costs associated with

53


Table of Contents

the September 19, 2012 debt transactions. Gains on investments declined $13.0 million, due to a combination of $4.6 million in lower unrealized gains from the change in fair value of our debt derivatives, and $12.6 million in lower gains on our seed capital investments, offset by $3.8 million in higher gains related to the change in estimated fair value of our ownership position in CLO/CDOs managed by one of our subsidiaries, Symphony Asset Management, and $0.4 million of higher capital gain distributions from our seed capital investments.

Consolidated VIEs and Funds, net

        Consolidated VIEs and Funds, net represents income/(loss) from variable interest entities and funds required to be consolidated into our financial statements. For further information, refer to Note 3, "Consolidated Variable Interest Entities," in the accompanying consolidated financial statements.

Net Interest Expense

        The following is a summary of net interest expense for the three years ended December 31, 2013:

 
  Year Ended December 31,  
 
  2013   2012   2011  
 
  (dollars in thousands)
 

Dividends and Interest Income

  $ 5,885   $ 5,290   $ 3,684  

Interest Expense

    (289,644 )   (345,560 )   (324,100 )
               

Total

  $ (283,759 ) $ (340,270 ) $ (320,416 )
               
               

        Net interest expense declined $56.5 million in 2013 compared to 2012. This decline is due mainly to the roll-off of certain interest rate hedges in the fourth quarter of 2012, as well as the re-pricing of loans under our senior secured credit facility in February and April 2013. This decline was partially offset by an increase in interest expense due to an increase in the overall level of outstanding debt resulting from our September 2012 debt transactions. Refer to "—Capital Resources, Liquidity and Financial Condition—Debt" heading below for additional information.

        Net interest expense increased $19.9 million in 2012 compared to 2011, mainly as a result of higher interest expense, which was caused by a higher level of outstanding debt.

Capital Resources, Liquidity and Financial Condition

        Our primary liquidity needs are to fund capital expenditures, service indebtedness and support working capital requirements. Our principal sources of liquidity are cash flows from operating activities and borrowings under our senior secured credit facility and senior unsecured notes.

        The following table presents selected significant components of our statement of cash flows for the years ended December 31, 2013, 2012 and 2011:

 
  Year Ended December 31,  
 
  2013   2012   2011  
 
  Dollars in thousands
 

Cash provided by operating activities

  $ 145,624   $ 60,148   $ 180,952  

Cash provided by/(used for) financing activities

    (66,279 )   239,648     288,477  

Cash used in investing activities(1)

    (45,026 )   (221,721 )   (395,170 )

(1)
Excludes net change in cash from consolidated VIEs and funds

54


Table of Contents

Cash from operating activities

        Cash flows from operating activities primarily include the receipt of investment advisory fees, performance fees and distribution fees offset by the payment of operating expenses incurred in the normal course of business, including the effect of cash payments related to year-end incentive compensation.

        Cash provided by operating activities for the year ended December 31, 2013 was $145.6 million, an increase of $85.5 million from the $60.1 million in 2012. The increase was primarily the result of a $49.8 million reduction in cash interest expense as the result of debt refinancing. In addition, during 2012, $39.1 million in liabilities accrued at the time of the Gresham closing were paid, reducing cash flow from operating activities in 2012.

        Cash provided by operating activities for the year ended December 31, 2012 were $60.1 million, a decline of $120.9 million from $181.0 million in 2011. The decline is primarily the result of a decline of $39.1 million in accrued liabilities at Gresham, a $66.9 million increase as a result of the timing of incentive compensation payments as well as an increase in cash interest expense of $26.6 million.

Cash from financing activities

        Cash flows from financing activities reflect distributions to non-controlling interests, the purchase of non-controlling interests in our investment affiliates and proceeds and payments associated with our debt.

        Cash outflows from financing activities for the year ended December 31, 2013 were $66.3 million driven mainly by $49.1 million in payments related to the refinancing of our debt. This amount compares unfavorably to cash from financing activities for the year ended December 31, 2012, during which we raised $239.6 million, primarily from the issuance of new debt.

        Cash inflows from financing activities for the year ended December 31, 2012 were $239.6 million and included $226.3 million of net proceeds from loans and notes payable. This compares unfavorably to the $288.5 million provided by financing activities in 2011, which primarily consisted of proceeds from loans payable used to finance the Gresham transaction.

Cash used in investing activities

        Cash flows from investing activities consist primarily of the purchase of equipment and leasehold improvements and cash paid in acquisitions and seed capital investments that we make in connection with the development of new investment products.

        Cash outflows from investing activities, excluding the impact of consolidated VIEs, for the year ended December 31, 2013 were $45.0 million and primarily included $18.7 million for the purchase of property and equipment, $35.1 million in funding for our mutual fund incentive program, offset by $7.2 million in net proceeds from the sale of investment securities.

        Cash outflows from investing activities, excluding the impact of consolidated VIEs, for the year ended December 31, 2012 were $177.3 million and consisted primarily of $157.2 million in additional consideration paid related to the Winslow acquisition, $44.2 million for the purchase of property and equipment, $15.0 million in funding for our mutual fund incentive program and $6.4 million in net purchases of investment securities.

55


Table of Contents

Liquidity

        The Company manages its financial condition and funding to maintain appropriate liquidity for the business. Capital resources at December 31, 2013 and 2012 were as follows:

 
  Year Ended
December 31,
 
 
  2013   2012  
 
  Dollars in thousands
 

Cash and cash equivalents(1)

  $ 324,717   $ 290,289  

Credit Facility—undrawn

    190,000     190,000  
           

Total Liquidity

  $ 514,717   $ 480,289  

(1)
Does not include cash and cash equivalents held by consolidated VIEs as the Company cannot access such cash to use in its operating activities

        Total liquidity increased $34.4 million during the year ended December 31, 2013 primarily reflecting positive operating cash flows, partially offset by debt refinancing costs and the funding of our long-term mutual fund incentive program.

        We believe that funds generated from operations and existing cash reserves will be adequate to fund debt service requirements, capital expenditures and working capital requirements for the foreseeable future. Our ability to continue to fund these items, to service debt and to maintain compliance with covenants in our debt agreements may be affected by general economic, financial, competitive, legislative, legal and regulatory factors and by our ability to refinance or repay outstanding indebtedness with scheduled maturities beginning in September 2015. In the event that we are unable to repay any of our outstanding indebtedness as it becomes due, we might need to explore alternative strategies for funding, such as selling assets, refinancing or restructuring our indebtedness or selling equity capital. However, securing alternative sources of funding might not be feasible, which could result in further adverse effects on our financial condition.

        Our senior secured credit facility includes a financial maintenance covenant requiring us to maintain a maximum ratio of net first lien secured indebtedness to adjusted EBITDA (as defined in the credit agreement). Refer to "—Capital Resources, Liquidity and Financial Condition—Senior Secured Credit Facility—Covenants" heading below. At December 31, 2013, this maximum ratio was 5.75:1.00. At December 31, 2013, we were in compliance with this covenant, as our actual ratio of net first lien secured indebtedness to adjusted EBITDA was 4.56:1.00 based on $2,247 million of net first lien secured indebtedness and adjusted EBITDA of $492.4 million. In addition, as of December 31, 2013, we were in compliance with all other covenants and restrictions in our debt agreements.

Debt

        In 2007, a group of private equity investors led by MDP acquired all of our outstanding capital stock. As a result of that transaction and the related financing transactions (collectively, the "MDP Transactions"), we significantly increased our level of debt. At December 31, 2013, we had approximately $4.5 billion in aggregate principal amount of indebtedness outstanding and had limited additional borrowing capacity.

        We have four types of debt obligations: (1) first-lien term loans; (2) second-lien term loans; (3) first-lien revolving credit facility; and (4) senior unsecured notes. Each is discussed in detail below.

56


Table of Contents

Senior Secured Credit Facility

Overview

        In connection with the MDP Transactions, we entered into a senior secured credit facility, consisting of a $2.3 billion first-lien term loan facility and a $250 million first-lien revolving credit facility (the "Original Revolving Credit Facility"). At the time of the MDP Transactions, we borrowed the full amount available under the $2.3 billion first-lien term loan facility (the "Original Term Loans"). We used the proceeds from this borrowing to finance part of the MDP Transactions.

        On December 31, 2010, we amended our senior secured credit facility pursuant to which, among other things, we: extended the final maturity of $171.0 million of commitments under the Original Revolving Credit Facility from November 13, 2013 to November 13, 2015 (the "Extended Revolving Credit Facility"), subject to certain springing maturity terms; extended the final maturity of $1.0 billion of Original Term Loans from November 13, 2014 to May 13, 2017 (the "Extended Term Loans"), subject to certain springing maturity terms; and converted $57.0 million of then-outstanding borrowings under our Original Revolving Credit Facility into additional Extended Term Loans.

        On December 30, 2011, we obtained an additional $280.0 million in first-lien term loans (the "Incremental Term Loans") under our senior secured credit facility. All proceeds of the Incremental Term Loans were used to pay a portion of the cash consideration for the acquisition of a controlling interest in Gresham.

        On February 29, 2012, we extended an additional $789.3 million of Original Term Loans into additional Extended Term Loans. On the same date, we refinanced $500.0 million of second-lien term loans that we had obtained under our senior secured credit facility in July and August of 2009 (the "Original Second-Lien Term Loans") by obtaining $500.0 million of new second-lien term loans under our senior secured credit facility (the "New Second-Lien Term Loans"). Proceeds from the Original Second-Lien Term Loans were used to pay down a portion of our first-lien term loans. Proceeds from the New Second-Lien Term Loans were used to repay the $500.0 million of Original Second-Lien Term Loans.

        On September 19, 2012, we amended our senior secured credit facility pursuant to which, among other things, we:

    obtained an additional $365.9 million in first-lien term loans having a final maturity of May 13, 2017 (the "New First-Lien Term Loans"), subject to the springing maturity date described under "—Maturity";

    used a portion of the proceeds from the New First-Lien Term Loans to repay $228.8 million of the $297.9 million of outstanding Original Term Loans along with related fees and expenses;

    extended the final maturity of the remaining $69.1 million of outstanding Original Term Loans from November 13, 2014 to May 13, 2017, subject to the springing maturity date described under "—Maturity";

    used a portion of the proceeds from the New First-Lien Term Loans to repay the $13.9 million outstanding under the Original Revolving Credit Facility and the $108.1 million outstanding under the Extended Revolving Credit Facility, along with related fees and expenses; and

    obtained a new $190.0 million first-lien revolving credit facility (the "New Revolving Credit Facility") having a final maturity of February 12, 2017, subject to the springing maturity date described under "—Maturity," which replaced both the Original Revolving Credit Facility and the Extended Revolving Credit Facility (the "Old Revolving Credit Facilities").

        After giving effect to the September 19, 2012 amendment, both the Original Term Loans that were extended, and the New First-Lien Term Loans that were obtained in connection with such amendment,

57


Table of Contents

had the same terms as the Extended Term Loans and, as a result, the term "Extended Term Loans" includes the extended Original Term Loans and the New First-Lien Term Loans for all purposes herein for any period after September 19, 2012. In addition, as a result of the September 19, 2012 amendment, all of our first-lien term loans, including the Incremental Term Loans, had a final maturity date of May 13, 2017, subject to the springing maturity date described under "—Maturity."

        Effective February 28, 2013, we amended our senior secured credit facility pursuant to which we reduced the interest rate spread applicable to all of the outstanding Extended Term Loans and Incremental Term Loans and all of the outstanding commitments under the New Revolving Credit Facility. In addition, as a result of the February 28, 2013 amendment, we converted the outstanding Extended Term Loans and Incremental Term Loans into a single tranche of outstanding term loans under our first-lien term loan facility (the "Tranche A First-Lien Term Loans").

        Effective April 29, 2013, we amended our senior secured credit facility pursuant to which we reduced the interest rate spread applicable to all of the outstanding Tranche A First-Lien Term Loans and New Second-Lien Term Loans, which are referred to herein for all periods after April 29, 2013 as the "Tranche B First-Lien Term Loans" and the "Tranche B Second-Lien Term Loans," respectively. In connection with the consummation of the April 29, 2013 amendment, we paid call premiums equal to 1.0% and 2.0% of the principal amount of refinanced Tranche A First-Lien Term Loans and New Second-Lien Term Loans, respectively, which totaled approximately $35.6 million, along with other customary fees and expenses.

Principal Amounts Outstanding

        At December 31, 2013, we had $2.6 billion of outstanding Tranche B First-Lien Term Loans and $500.0 million of outstanding Tranche B Second-Lien Term Loans.

        At December 31, 2013, we did not have any outstanding borrowings under our New Revolving Credit Facility.

Maturity

        Subject to the springing maturity date described below, the Tranche B First-Lien Term Loans mature on May 13, 2017, the Tranche B Second-Lien Term Loans mature on February 28, 2019, and the commitments and any borrowings under our New Revolving Credit Facility mature on February 12, 2017.

        The Tranche B First-Lien Term Loans, the Tranche B Second-Lien Term Loans and the commitments under our New Revolving Credit Facility are subject to a springing maturity date. The final maturity date for each will change to the 90th day prior to the maturity of our 5.5% senior notes due September 15, 2015 (i.e., June 17, 2015) if, on such date, the aggregate principal amount of all such 5.5% senior notes is equal to or greater than our adjusted EBITDA (as defined in the credit agreement governing our senior secured credit facility) for the most recently ended four fiscal quarters.

        Under the terms of the credit agreement governing our senior secured credit facility, we may refinance (at par or with any applicable premium, costs and expenses) our Tranche B First-Lien Term Loans, Tranche B Second-Lien Term Loans and any borrowings or commitments under our New Revolving Credit Facility through (i) in the case of each of our borrowings other than the New Second-Lien Term Loans, the issuance of first-lien senior notes or loans secured by the collateral securing the obligations under the credit agreement on a pari passu basis, (ii) the issuance of second-lien senior notes or loans secured by the collateral securing the obligations under the credit agreement on a second-lien basis, (iii) the issuance of unsecured senior notes or loans, and/or (iv) the incurrence of new classes of term loans and/or revolving credit commitments under the credit

58


Table of Contents

agreement (including through a conversion or exchange of existing term loans and/or existing revolving credit borrowings or commitments into such new classes).

Prepayments

        The credit agreement permits all or any portion of the borrowings outstanding under our senior secured credit facility to be prepaid at par, except that voluntary prepayments of the Tranche B Second-Lien Term Loans prior to April 29, 2014 would be subject to a 1.0% prepayment premium.

        We may be required to make a mandatory prepayment of the borrowings outstanding under our senior secured credit facility in certain circumstances, including a material sale of our assets in which the proceeds are not reinvested in our business and the accumulation of "excess cash flow," as defined in the credit agreement governing our senior secured credit facility. In addition, upon the occurrence of certain "change of control" transactions, we must make an offer to repay all or any part of each Tranche B Second-Lien Term Loan at a price of 101% of the principal amount thereof plus accrued and unpaid interest thereon.

Guarantors and Security

        All obligations under our senior secured credit facility are guaranteed by Parent, and each of our present and future, direct and indirect, wholly-owned material subsidiaries (excluding broker-dealer subsidiaries, foreign subsidiaries and domestic subsidiaries whose only assets are equity interests in foreign subsidiaries). The obligations under our senior secured credit facility and these guarantees are secured, subject to permitted liens and other specified exceptions, (i) on a first-lien basis, by all of our capital stock and the capital stock of certain of our subsidiaries (excluding significant subsidiaries and limited, in the case of foreign subsidiaries, to 100% of the non-voting capital stock and 65% of the voting capital stock of the first tier foreign subsidiaries) directly held by us or any guarantor and (ii) on a first-lien basis by substantially all of our and each guarantor's present and future assets, except that the Tranche B Second-Lien Term Loans are secured by the same capital stock and assets on a second-lien basis.

Interest and Fees

        The Tranche B First-Lien Term Loans bear interest at a rate per annum of LIBOR plus a spread of 4.00% (or alternate base rate plus 3.00%), subject to a 25 basis point step-down in the spread if we achieve a senior secured net leverage ratio (as defined below) of 4.00:1.00 or less. The Tranche B Second-Lien Term Loans bear interest at a rate per annum of LIBOR (subject to a 1.25% floor) plus a spread of 5.25% per annum (or alternate base rate (subject to a 2.25% floor) plus 4.25%). Borrowings under the New Revolving Credit Facility bear interest at a rate per annum of LIBOR plus a spread of 5.00% (or alternate base rate plus 4.00%), subject to a 25 basis point step-down in the spread if we achieve a senior secured net leverage ratio of 4.00:1.00 or less but greater than 3.25:1.00, and a 50 basis point step-down in the spread if we achieve a senior secured net leverage ratio of 3.25:1.00 or less. See "—Recent Updates to Authoritative Accounting Literature—Interest Rate Sensitivity" below for a discussion of the Company's interest rate hedging activities.

        In addition to paying interest on outstanding principal of borrowings under our senior secured credit facility, we are required to pay a commitment fee to the lenders in respect of any unutilized loan commitments under the New Revolving Credit Facility at a rate of 0.375% per annum.

Covenants

        The credit agreement governing our senior secured credit facility contains a financial maintenance covenant that prohibits us from exceeding a ratio of (i) funded first-lien secured indebtedness (expressly excluding the Tranche B Second-Lien Term Loans) less unrestricted cash and cash

59


Table of Contents

equivalents to (ii) consolidated adjusted EBITDA (as defined in the credit agreement) of 5.75:1.00 (the "senior secured net leverage ratio"). The credit agreement also contains a number of other covenants that, among other things, limit or restrict our ability to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make dividends and other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, change our line of business or engage in certain transactions with affiliates.

Covenant Compliance

        Under the indentures governing our notes and the credit agreement governing our senior secured credit facility, our ability to engage in activities such as incurring additional indebtedness, making certain investments, refinancing certain indebtedness, making certain restricted payments including dividends and entering into certain merger transactions is governed, in part, by our ability to satisfy tests based on adjusted EBITDA. In addition, the credit agreement governing our senior secured credit facility contains a financial maintenance covenant that prohibits us from exceeding a ratio of (i) funded first-lien secured indebtedness less unrestricted cash and cash equivalents to (ii) adjusted EBITDA of 5.75:1.00. Step downs in the interest rate spread applicable to loans under our senior secured credit facility are based upon the same ratio used in the financial covenant.

        "Adjusted EBITDA" is defined as consolidated net income/(loss) before net interest expense, income tax/(benefit), depreciation and amortization and income/(expense) attributable to consolidated variable interest entities, further adjusted for non-cash compensation, structured product distribution expense, retention, severance and recruiting expense, goodwill, intangible and other impairments, acquisitions, and certain other non-cash, non-recurring and other items.

        We believe that the presentation of adjusted EBITDA is appropriate to provide additional information to investors about the calculation of, and compliance with, the financial maintenance covenant in the credit agreement governing our senior secured credit facility. We caution investors that amounts presented in accordance with our definition of adjusted EBITDA may not be comparable to similar measures disclosed by other issuers, because not all issuers and analysts calculate adjusted EBITDA in the same manner. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income/(loss) or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity.

60


Table of Contents

        The following table sets forth a reconciliation of net income (loss) attributable to Nuveen Investments, as determined under GAAP, to adjusted EBITDA:

 
  Year ended
December 31,
2013
 
 
  (in thousands)
 

Net income attributable to Nuveen Investments

  $ 45,228  

Net income attributable to Symphony CLO V

    (4,725 )

Net interest expense excluding consolidated variable interest entities

    283,759  

Income tax benefit

    (42,385 )

Depreciation and amortization

    69,309  

Non-cash compensation

    51,013  

Structured products distribution expense(a)

    10,116  

Retention, severance, and recruiting expense(b)

    51,690  

Goodwill, intangible and other impairment

     

Acquisitions(c)

    (87,301 )

Other adjustments(d)

    115,733  

Adjusted EBITDA

  $ 492,437  

(a)
Structured products distribution expense represents structuring fees and upfront distribution costs paid for closed-end funds, mutual funds, and other structured products such as collateralized loan and debt obligations.

(b)
Retention, severance, and recruiting expense represents costs associated with employee retention programs, costs related to employee severance agreements and costs to recruit employees, such as relocation expense.

(c)
Includes the fair value adjustment on the Gresham contingent consideration.

(d)
Other adjustments include, but are not limited to, non-recurring items, such as gains and losses on certain investments, impairment charges, loss on debt restructuring, and other adjustments.

Events of Default

        The credit agreement governing our senior secured credit facility contains customary events of default including: non-payment of principal; non-payment of interest or fees; non-payment of any other amounts due under our senior secured credit facility; inaccuracy of representations or warranties in any material respect; failure to perform or observe covenants set forth in the documentation governing our senior secured credit facility; cross-defaults to material indebtedness; bankruptcy and insolvency defaults; monetary judgment defaults to the extent not covered by indemnities or insurance; loss of lien perfection or priority on a material portion of the collateral; invalidity of guarantees or security documents; ERISA events; and a change of control.

Senior Unsecured Notes

9.125% Senior Notes due 2017 / 9.5% Senior Notes due 2020

        On September 19, 2012, we completed a notes offering (the "2017/2020 Notes Offering") of (i) $500,000,000 aggregate principal amount of 9.125% senior notes due 2017 (the "2017 Notes") and (ii) $645,000,000 aggregate principal amount of 9.5% senior notes due 2020 (the "2020 Notes" and together with the 2017 Notes, the "2017/2020 Notes"). The 2017 Notes will mature on October 15, 2017 and accrue interest at the rate of 9.125% per year. The 2020 Notes will mature on October 15, 2020

61


Table of Contents

and accrue interest at the rate of 9.5% per year. Interest on the 2017/2020 Notes is payable semi-annually in cash in arrears on April 15 and October 15 of each year. The net proceeds of the 2017/2020 Notes Offering were primarily used to repurchase and redeem all of our then outstanding 10.5% senior unsecured notes due 2015 and pay the related fees and expenses. The remaining proceeds were used for general corporate purposes. The 2017/2020 Notes rank equally in right of payment with all of our other existing and future senior unsecured indebtedness and senior in right of payment to any future indebtedness that is subordinated in right of payment to the notes. Obligations under the 2017/2020 Notes are guaranteed by Parent and each of our present and future, direct and indirect, wholly owned material domestic subsidiaries that guarantee our obligations under our senior secured credit facility (discussed above). Such guarantees are subordinated in right of payment to the guarantees of our obligations under our senior secured credit facility and related hedging obligations and any of our future secured indebtedness.

        We may redeem some or all of the 2017 Notes at any time prior to October 15, 2014 by paying a price equal to 100% of the principal amount plus a "make-whole" premium, along with accrued and unpaid interest and additional interest (as defined in the indentures governing the 2017/2020 Notes), if any, to the date of redemption. At any time prior to October 15, 2014, we may, on one or more occasions, use the net cash proceeds of certain equity offerings to redeem up to 35% of the principal amount of the 2017 Notes at a redemption price equal to 109.125% of their principal amount, plus accrued and unpaid interest and additional interest, if any, to the redemption date; provided that at least 65% of the aggregate principal amount of the 2017 Notes originally issued remains outstanding immediately following such redemption and such redemption occurs within 90 days of such equity offering. At any time on or after October 15, 2014, the 2017 Notes may be redeemed at the redemption prices (expressed as a percentage of the principal amount) set forth below, plus accrued and unpaid interest, and additional interest, if any, to, but not including, the redemption date, if redeemed during the twelve-month period beginning on October 15 of the years indicated below:

Year
  Percentage  

2014

    106.844 %

2015

    104.563 %

2016 and thereafter

    100.000 %

        We may redeem some or all of the 2020 Notes at any time prior to October 15, 2016 by paying a price equal to 100% of the principal amount plus a "make-whole" premium, along with accrued and unpaid interest and additional interest, if any, to the date of redemption. At any time prior to October 15, 2015, we may, on one or more occasions, use the net cash proceeds of certain equity offerings to redeem up to 35% of the principal amount of the 2020 Notes at a redemption price equal to 109.5% of their principal amount, plus accrued and unpaid interest and additional interest, if any, to the redemption date; provided that at least 65% of the aggregate principal amount of the 2020 Notes originally issued remains outstanding immediately following such redemption and such redemption occurs within 90 days of such equity offering. At any time on or after October 15, 2016, the 2020 Notes may be redeemed at the redemption prices (expressed as a percentage of the principal amount) set forth below, plus accrued and unpaid interest and any additional interest, if any, to, but not including, the redemption date, if redeemed during the twelve-month period beginning on October 15 of the years indicated below:

Year
  Percentage  

2016

    104.750 %

2017

    102.375 %

2018 and thereafter

    100.000 %

62


Table of Contents

        The indentures governing our 2017/2020 Notes contain a number of covenants that, among other things, limit or restrict our ability and the ability of our restricted subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make dividends and other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, change our line of business or engage in certain transactions with affiliates. Although we are not required to make mandatory redemption or sinking fund payments with respect to the 2017/2020 Notes, we are required to make an offer to purchase the 2017/2020 Notes in the event of a change of control or certain material sales of our assets.

        The indentures governing our 2017/2020 Notes also contain customary events of default including: non-payment of principal; non-payment of interest or other amounts due under the notes; failure to perform or observe covenants set forth in the indentures; cross defaults to material indebtedness; bankruptcy and insolvency defaults; monetary judgment defaults to the extent not covered by indemnities or insurance; and failure of guarantees to be in full force and effect.

        The 2017/2020 Notes were sold in a private placement and have not been registered under the Securities Act of 1933. We have agreed, under the terms of a registration rights agreement, to (i) file, no later than 18 months after the issue date of the 2017/2020 Notes, a registration statement (the "Exchange Offer Registration Statement") with the SEC with respect to a registered offer to exchange the 2017/2020 Notes and related guarantees for new notes (the "Exchange Notes") and related guarantees of ours having terms substantially identical in all material respects to the 2017/2020 Notes and related guarantees (except that the Exchange Notes do not contain any transfer restrictions) (the "Exchange Offer"), (ii) use commercially reasonable efforts to have the Exchange Offer Registration Statement declared effective by the SEC on or prior to 21 months after the issue date of the 2017/2020 Notes (or two years if reviewed by the SEC) and (iii) use commercially reasonable efforts to consummate the Exchange Offer within 30 business days after the Exchange Offer Registration Statement is declared effective by the SEC. In addition, we agreed, in some circumstances, to file a "shelf registration statement" that would allow some or all of the 2017/2020 Notes to be offered to the public. If we do not comply with our obligations under the registration rights agreements, we will be required to pay additional interest to holders of the 2017/2020 Notes.

5.5% Senior Notes due 2015

        We have outstanding $300 million aggregate principal amount of 5.5% senior notes due September 15, 2015 (the "5.5% senior notes"). The 5.5% senior notes rank equally in right of payment with all of our other existing and future senior unsecured indebtedness. The 5.5% senior notes bear interest at a rate of 5.5% per annum, payable semiannually in arrears on March 15 and September 15 of each year. The 5.5% senior notes are not guaranteed by any of our subsidiaries.

        We may redeem the 5.5% senior notes, in whole or in part, at any time upon payment of a redemption price equal to (i) the greater of (a) 100% of the principal amount of the 5.5% senior notes to be redeemed or (b) the remaining scheduled payments of principal and interest on the 5.5% senior notes being redeemed, discounted to the redemption date on a semiannual basis at the treasury rate, plus 20 basis points, plus (ii) accrued and unpaid interest, if any, on the notes to be redeemed.

        The indenture governing the 5.5% senior notes contains a number of covenants that, among other things, limit or restrict our ability to create liens on the capital stock of our significant subsidiaries (as defined in Rule 1-02 of Regulation S-X under the Securities Act) that secure debt senior to the 5.5% senior notes, dispose of the capital stock of any of our significant subsidiaries or engage in mergers or consolidations. The indenture also contains customary events of default including payment defaults; covenant defaults; insolvency or bankruptcy; and cross defaults to other indebtedness.

63


Table of Contents

Derivative Instruments

        From time to time, we seek to offset our exposure to changing interest rates under our debt financing arrangements by entering into interest rate hedging contracts. We have entered into four five-year forward-starting interest rate swap contracts under which we agreed to pay an amount equal to a specified fixed rate of interest on a notional principal amount, and to in turn receive an amount equal to a specified variable rate of interest on the same notional principal amount. The swap contracts have an effective date of December 31, 2014 and a termination date of December 31, 2019. Under the swap contracts, we receive one-month LIBOR and pay a fixed rate of 1.74% (on a weighted average basis) on an initial notional amount of $1.5 billion, which decreases to $1.25 billion on December 31, 2017 and to $1.0 billion on December 31, 2018. Our obligations under these swap contracts are guaranteed and secured on a pari passu basis with the first-lien loans outstanding under our senior secured credit facility.

Aggregate Contractual Obligations

        We have contractual obligations to make future payments under short-term and long-term debt, as well as long-term non-cancelable lease agreements. The following table summarizes these contractual obligations at December 31, 2013 (excludes debt from consolidated VIEs):

 
  Principal Payments
on Debt(1)
  Estimated Interest
Payments on Debt(2)
  Estimated
Payments/
(Receipts)—
Derivative
Transactions(2)
  Operating Leases(3)   Total  
 
  (dollars in thousands)
 

2014

      $ 264,887       $ 16,607   $ 281,494  

2015

  $ 300,000     266,650   $ 19,798     17,515     603,963  

2016

        277,357     7,450     18,053     302,860  

2017

    3,061,251     192,466     (7,884 )   17,309     3,263,142  

2018

        103,558     (16,052 )   17,286     104,792  

Thereafter

    1,145,000     116,917     (18,388 )   88,438     1,331,967  
                       

Total

  $ 4,506,251   $ 1,221,835   $ (15,076 ) $ 175,208   $ 5,888,218  

(1)
Quarterly principal payments are not required.

(2)
Future payments on the term loan facility (which are based on a floating interest rate of LIBOR) and the estimate payments/(receipts)—derivative transactions were estimated using a forward yield curve (as of 2/10/14). The assumed LIBOR rates were: 0.18% for 2014, 0.43% for 2015, 1.24% for 2016, 2.25% for 2017, 3.00% for 2018.

(3)
Operating leases represent the minimum rental commitments under non-cancelable operating leases. We have no significant capital lease obligations.

Contingent Consideration

        In connection with our 2008 acquisition of Winslow Capital, we became contingently liable to make additional purchase price payments to the sellers, up to a maximum of $180.0 million in the aggregate. The final payment, in the amount of $16.3 million was made during the first quarter of 2014.

        In connection with our acquisition of Gresham in 2011, we became contingently liable to make additional purchase price payments to the sellers. There is no maximum as it relates to this additional contingent consideration. These payments are primarily contingent upon the growth in Gresham's EBITDA during each year in the five year period ending 2016. We do not expect to make a payment

64


Table of Contents

under this arrangement in 2014. At December 31, 2013, we have $37.2 million recorded as the fair value of this contingent consideration.

Redeemable Non-Controlling Interests at Gresham

        On December 31, 2011, we acquired 60% of the equity interests of Gresham. The holders of a portion of the 40% of equity interests that we did not purchase have the option to require us to purchase their interests at the later of the holder's death or disability or the fifth anniversary of the acquisition date. At December 31, 2013 and 2012, the Company had $194.1 million and $201.8 million, respectively, recorded on its consolidated balance sheets for Gresham redeemable noncontrolling interests.

Affiliate Equity Programs

        In order to allow key individuals to participate in the earnings growth and cash flows of their respective businesses, we have instituted equity programs at each of our affiliated investment managers. During 2011, equity programs were put in place for Symphony, Santa Barbara, NWQ and NAM. During 2012, equity programs were put in place for Tradewinds and Winslow Capital. The equity program at Gresham pre-existed the acquisition and remains in place.

        Each of the affiliate equity programs consists of profits interests, which are generally subject to multi-year vesting periods. The fair market value of the profits interests, determined as of their grant date, is amortized as an expense over the term of the applicable vesting period. Holders of profits interests are entitled to receive a distribution of the cash flow from their business. With respect to certain of the profits interests, distributions are only made to the extent such cash flow exceeds certain thresholds. Furthermore, distributions with respect to certain of the profits interests are subject to an annual cap. During the years ended December 31, 2013 and 2012, we recorded approximately $15.4 million and $12.2 million, respectively, of income attributable to these noncontrolling interests.

        Interests held by non-controlling interest holders at each of our affiliates other than Gresham are not subject to mandatory redemption. The purchase of non-controlling interests is predicated, for each of them, on the exercise of a series of puts held by non-controlling interest holders and calls held by us. Neither the exercise of the puts nor the exercise of the calls is contingent upon the non-controlling interest holders remaining employed by the affiliated entity. Generally, the puts provide the non-controlling interest holders the right to require us to purchase all of their interests upon the occurrence of certain events, such as death or disability, or specified percentages of their interests at specified intervals over time following certain other events, such as a sale of the Company. The calls generally provide us with the right to require the non-controlling interest holders to sell their equity interests to us at specified intervals over time, as well as upon the occurrence of certain events, such as termination of employment. As a result, there is significant uncertainty as to the timing of any non-controlling interest purchase in the future. The value assigned to the purchase of a non-controlling interest is generally based on a multiple of earnings before interest, taxes and amortization of the affiliate, which is a measure that is intended to represent fair market value. There is no discrete floor or ceiling on any non-controlling interest purchase. As a result, there is significant uncertainty as to the amount of any non-controlling interest purchase in the future. Accordingly, future payments to be made to purchase non-controlling interests have been excluded from the above table, unless a put or call option has been exercised and a commitment exists for us to purchase such non-controlling interests. Although the timing and amounts of these purchases cannot be predicted with certainty, we anticipate that the purchase of non-controlling interests in our affiliates may be a significant use of cash in future years. At December 31, 2013 and 2012, the amount included in our consolidated balance sheet for these redeemable noncontrolling interests is $82.6 million and $40.7 million, respectively.

65


Table of Contents

Other Commitments

        As of December 31, 2013, we had a remaining unfunded commitment of $6.2 million to invest in two related outside private equity partnerships that were organized for the purpose of making and managing investments in the asset management industry, including investments in businesses that manage assets on behalf of, or provide advice to, their clients and businesses that provide other products or services related to asset management. As of December 31, 2013, we have invested $5.8 million of the total $12.0 million committed. The timing for the remaining investments is dependent on future capital calls.

Broker-Dealer

        Our broker-dealer subsidiary is subject to requirements of the SEC relating to liquidity and capital standards. Refer to Note 12, "Net Capital Requirement," in the accompanying 2013 consolidated financial statements.

Off-Balance Sheet Arrangements

        We do not invest in any off-balance sheet vehicles that provide financing, liquidity, market or credit risk support or engage in any leasing activities that expose us to any liabilities that are not reflected in our Annual Financial Statements and our Quarterly Financial Statements.

Critical Accounting Policies

        Our financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles. Preparing financial statements requires management to make estimates and assumptions that impact our financial position and results of operations. These estimates and assumptions are affected by our application of accounting policies. We describe certain critical accounting policies below that we believe are important to understand our results of operations and financial position. Refer to Note 1, "Basis of Presentation and Summary of Significant Accounting Policies," to the accompanying 2013 consolidated financial statements for additional information.

Revenue Recognition

        Investment advisory fees from assets under management are recognized ratably over the period that assets are under management. Performance fees are recognized only at the performance measurement date contained in the individual account management agreements and are dependent upon performance of the account exceeding agreed-upon benchmarks over the relevant period. Some of our investment management agreements provide that, to the extent certain enumerated expenses exceed a specified percentage of a fund's or a portfolio's average net assets for a given year, the advisor will absorb such expenses through a reduction in management fees. Investment advisory fees are recorded net of any such expense reductions. Investment advisory fees are also recorded net of any sub-advisory fees paid by us, based on the terms of those arrangements.

Equity Based Compensation

        Our equity based compensation plans include: deferred and restricted Class A Units, deferred incentive Class A Units, and affiliate level equity plans. Equity based compensation expense reflects the fair value of equity-based awards measured at the grant date and is amortized over the relevant service period.

        The deferred and restricted Class A Unit program entitles holders to receive the same economic benefit as the Class A Units at Holdings. These grants were valued based on the overall value of Holdings. This value was derived using both income (discounted cash flow) and market approaches

66


Table of Contents

(guideline company method). Significant forecast assumptions used in the income approach include: revenue growth rate; gross profit; operating expenses as a percent of revenue; earnings before interest, taxes, depreciation and amortization ("EBITDA"); capital expenditures; and debt-free working capital. Significant assumptions used in the market approach include a control premium and multiples of indicated value to EBITDA. Assumptions inherent in EBITDA estimates include assumptions about: operational risk, growth expectations, and profitability.

        Deferred incentive Class A Units are profits interests. Profits interests are intended to provide management with the opportunity to participate in future growth of Holdings. Key inputs used in the valuation of this program include: the underlying value of Holdings; years until an expected liquidity event; expected volatility; expected dividends; risk-free rate; and discount for lack of marketability.

        The affiliate level equity plans are also profits interests. These interests were valued using a discounted cash flow method which calculated the present value of projected pre-tax cash flow streams. In calculating the fair market value, a number of different growth scenarios and discount rates were developed. Critical items considered in determining appropriate growth scenarios included: historical performance, product capacity, marketing initiatives, management capacity and the perceived value of the interests by the individuals who play a critical role in producing growth.

        Many of the assumptions used in valuing our equity plans require management's judgment. If we used different assumptions or if we used a different type of pricing methodology, the fair value of our equity based grants and related compensation expense might have been different.

Goodwill and Intangible Assets

Goodwill

        Under Codification, goodwill is not amortized but is tested at least annually for impairment by comparing the fair value of the reporting unit to its carrying value amount, including goodwill. Accounting Standards Update ("ASU") No. 2011-8, "Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment" ("ASU No. 2011-8") allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under ASU No. 2011-8, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative asses