EX-99.1 2 c14589exv99w1.htm PRESS RELEASE exv99w1
 

     
(LOGO)
    
 
    
FOR IMMEDIATE RELEASE
  CONTACT: Chris Allen
ATTN: Business/Financial Editors
  (312)917-8331
 
  christopher.allen@nuveen.com
 
    
 
  Natalie Brown
 
  (312)917-8077
 
  natalie.brown@nuveen.com
Nuveen Investments Reports Record 1st Quarter Earnings
And Assets Under Management of $166 Billion
Chicago, IL, April 30, 2007— Nuveen Investments, Inc. (NYSE: JNC), a leading provider of diversified investment services, today reported record first quarter earnings. First quarter net income of $52.3 million increased 17% over the first quarter of 2006 and earnings per share (diluted) of $0.63 increased 17% from the same period last year. The Company’s first-quarter operating revenues of $196.8 million increased 23% over the prior year with advisory fee income up 21% year over year.
First quarter gross sales were $8.1 billion. Gross sales in the period were comprised of $3.4 billion in institutional separate accounts, $2.7 billion in high-net-worth managed accounts, $1.7 billion in mutual funds and $0.3 billion in closed-end funds. Net flows were $3.0 billion.
Total assets under management increased to $166.1 billion at March 31, 2007, from $145.0 billion a year ago and from $161.6 billion at the beginning of the year. The 15% increase in assets under management over the prior year was driven by $12.5 billion of net flows and $8.6 billion of market appreciation. From the beginning of the year, assets under management increased by $4.5 billion due to $3.0 billion of net flows and $1.5 billion of market appreciation.
Commenting on the Company’s results, Tim Schwertfeger, Chairman & CEO of Nuveen Investments, said, “We are very pleased to report another quarter of high-quality growth in revenue, earnings, and assets under management. We continue to make solid progress in elevating our institutional presence and building out our mutual fund business. Our institutional business generated sales of $3.4 billion and net flows of $2.2 billion in the quarter, both of which were more than double last year’s first quarter level. This growth was partially driven by $900 million in collateralized debt or loan obligations through our Symphony investment team. In mutual funds, our momentum continued with net flows exceeding $1.0 billion for the second quarter in a row, primarily driven by demand for our high yield fund and our value equity funds. We anticipate some moderation in mutual fund growth in the second half of the year as we continue to rationalize our capacity in certain of our value equity strategies.”
“As we announced earlier this month, we plan to acquire HydePark Investment Strategies, a highly regarded specialist in enhanced equity investment management. The acquisition includes Richards & Tierney, a firm that provides specialized risk control and portfolio advisory services to institutional investors. With $350 million in assets under management, HydePark currently serves a diverse and impressive roster of institutional clients. We feel that their risk-managed, enhanced equity index strategies will meaningfully broaden our product line-up.”
-more-

 

 

Nuveen Investments Reports Record 1st Quarter Earnings — Page 2
“In retail managed accounts, sales of $2.8 billion increased 10% compared to the previous quarter; however, sales declined 60% compared to the prior year as a result of our decision to close our Tradewinds international offering in April of 2006. Net outflows of $547 million for the quarter were in line with our expectations and were driven by Rittenhouse outflows and natural redemptions in our closed investment strategies at NWQ and Tradewinds. We remain in a transition period in our retail managed accounts business as we continue to ramp up other strategies, incubate new strategies and redeploy existing capacity to higher fee platforms and channels,” added Schwertfeger.
“In March, we raised approximately $300 million in a new closed-end fund offering, the Nuveen Core Equity Alpha Fund, and in the coming months, we plan to participate very actively in the market for new closed-end funds, as investors’ appetite for innovative new products remains strong. As a result of this participation, we will experience higher earnings volatility as we will incur upfront structuring fees on new closed-end funds. ”
“Our broadened investment capabilities and diversified asset base position us well for continued growth,” said Schwertfeger. “We ended the quarter with equity assets accounting for 51% of our total assets and municipal and taxable income-oriented portfolios comprising 39% and 10% of total assets, respectively.”
Nuveen Investments will host a conference call to discuss its first quarter results today at 10 a.m. central time. To access this call live or listen to an audio replay, visit the investor relations section of the Company’s website at www.nuveen.com.
Nuveen Investments provides high-quality investment services designed to help secure the long-term goals of institutions and high-net-worth investors as well as the consultants and financial advisors who serve them. Nuveen Investments markets its growing range of specialized investment solutions under the high-quality brands of NWQ, Nuveen, Santa Barbara, Tradewinds, Rittenhouse and Symphony. In total, the Company manages $166 billion in assets as of March 31, 2007. Nuveen Investments is listed on the New York Stock Exchange and trades under the symbol “JNC.”
Certain statements made by the Company in this release are forward-looking statements. The Company’s actual future results may differ significantly from those anticipated in any forward-looking statements due to numerous factors. These include, but are not limited to, the effects of the substantial competition in the investment management business, including competition for access to brokerage firms’ retail distribution systems, the Company’s reliance on revenues from investment management contracts which renew annually, regulatory developments, accounting pronouncements, and other additional risks and uncertainties as set forth in the Company’s filings with the SEC. The Company undertakes no responsibility to update publicly or revise any forward-looking statements.
###
Financial Table Follows

 

 

NUVEEN INVESTMENTS
CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended December 31, 2006 and the Quarter Ended March 31, 2007
In thousands, except share data
                                         
    2006
    1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Total
REVENUES:
                                        
 
                                        
Investment advisory fees from assets under management (1)
   $ 156,275       168,923       176,925       183,725       685,847  
Product distribution
     1,237       733       1,697       1,077       4,745  
Performance fees/other revenue
     2,635       2,519       3,284       10,798       19,236  
Total operating revenues
     160,146       172,175       181,906       195,600       709,828  
 
                                        
EXPENSES:
                                        
 
                                        
Compensation and benefits
     53,821       59,646       72,911       77,307       263,686  
Advertising and promotional costs
     2,670       2,676       3,728       4,427       13,500  
Occupancy and equipment costs
     5,931       5,975       6,032       6,246       24,184  
Amortization of intangible assets
     1,673       2,798       1,995       1,967       8,433  
Travel and entertainment
     2,108       2,677       2,290       3,082       10,158  
Outside and professional services
     7,144       7,543       7,411       8,713       30,811  
Minority interest expense
     1,481       1,607       1,398       1,744       6,230  
Other operating expenses
     5,758       9,083       9,324       7,618       31,782  
Total operating expenses
     80,586       92,004       105,089       111,104       388,783  
 
                                        
OTHER INCOME/(EXPENSE)
     2,329       3,286       6,721       3,391       15,726  
 
                                        
NET INTEREST EXPENSE
     (8,345 )     (7,389 )     (6,678 )     (5,753 )     (28,166 )
 
                                        
INCOME BEFORE TAXES
     73,544       76,068       76,859       82,134       308,605  
 
                                        
INCOME TAXES:
                                        
 
                                        
Federal
     24,122       24,950       24,901       25,975       99,948  
State
     4,560       4,716       5,775       5,925       20,976  
Total income taxes
     28,682       29,666       30,676       31,900       120,924  
 
                                        
NET INCOME
   $ 44,862       46,402       46,183       50,234       187,680  
 
                                        
AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING:
                                        
 
                                        
Basic
     77,804       78,028       77,669       77,908       77,852  
Diluted
     83,044       83,069       82,934       83,401       83,148  
 
                                        
EARNINGS PER SHARE:
                                        
 
                                        
Basic
   $ 0.58       0.59       0.59       0.64       2.41  
Diluted
   $ 0.54       0.56       0.56       0.60       2.26  
 
                                        
GROSS SALES (in millions):
                                        
 
                                        
Mutual funds
   $ 1,347       1,505       1,374       1,416       5,642  

 

 

                                         
    2006
    1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Total
Managed accounts–retail
     7,230       4,875       2,500       2,517       17,122  
Managed accounts -institutional
     1,532       2,581       2,450       2,183       8,747  
Closed-end funds
     —       226       369       —       595  
Total funds and accounts
   $ 10,109       9,187       6,694       6,116       32,106  
 
                                        
NET FLOWS (in millions):
                                        
Mutual funds
   $ 864       856       886       1,015       3,622  
Managed accounts-retail
     4,114       2,178       (454 )     (350 )     5,488  
Managed accounts -institutional
     932       1,811       1,590       1,275       5,607  
Closed-end funds
     (6 )     228       380       15       616  
Total funds and accounts
   $ 5,903       5,072       2,402       1,955       15,332  
 
                                        
MANAGED FUNDS AND ACCOUNTS (in millions):
                                        
 
                                        
ASSETS UNDER MANAGEMENT:
                                        
Beginning of period
   $ 136,117       145,017       148,994       154,167       136,117  
Sales – funds and accounts
     10,109       9,187       6,694       6,116       32,106  
Dividend reinvestments
     64       86       102       247       498  
Redemptions and withdrawals
     (4,269 )     (4,200 )     (4,394 )     (4,409 )     (17,272 )
Total net flows into funds and accounts
     5,903       5,072       2,402       1,955       15,332  
Appreciation/ (depreciation)of managed assets
     2,997       (1,096 )     2,771       5,487       10,160  
End of period
   $ 145,017       148,994       154,167       161,609       161,609  
 
                                        
RECAP BY PRODUCT TYPE:
                                        
 
                                        
Mutual funds
   $ 15,398       16,133       17,407       18,532          
Closed-end funds
     51,813       51,388       52,791       52,958          
Managed accounts-retail
     53,651       55,277       55,633       58,556          
Managed accounts - institutional
     24,154       26,195       28,335       31,563          
Total assets under management
   $ 145,017       148,994       154,167       161,609          
 
                                        
RECAP BY MANAGER:
                                        
Nuveen
   $ 75,005       75,072       77,195       78,328          
NWQ
     31,806       32,145       33,066       35,564          
Rittenhouse
     5,072       4,159       3,687       3,519          
Santa Barbara
     4,037       4,169       4,429       4,576          
Symphony
     6,247       6,870       7,168       7,651          
Tradewinds
     22,850       26,579       28,623       31,970          
Total assets under management
   $ 145,017       148,994       154,167       161,609          
 
                                        
RECAP BY STYLE:
                                        
Equity-based
   $ 69,964       73,636       76,773       82,772          
Municipals
     60,585       60,643       62,765       63,751          
Taxable income-oriented
     14,468       14,715       14,629       15,086          
Total assets under management
   $ 145,017       148,994       154,167       161,609          

 

 

                                         
    2007  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Total  
REVENUES:
                                        
 
                                        
Investment advisory fees from assets under management (1)
   $ 189,716       —       —       —       189,716  
Product distribution
     1,422       —       —       —       1,422  
Performance fees/other revenue
     5,689       —       —       —       5,689  
Total operating revenues
     196,827       —       —       —       196,827  
 
                                        
EXPENSES:
                                        
 
                                        
Compensation and benefits
     73,475       —       —       —       73,475  
Advertising and promotional costs
     3,391       —       —       —       3,391  
Occupancy and equipment costs
     6,741       —       —       —       6,741  
Amortization of intangible assets
     1,967       —       —       —       1,967  
Travel and entertainment
     2,185       —       —       —       2,185  
Outside and professional services
     8,005       —       —       —       8,005  
Minority interest expense
     2,335       —       —       —       2,335  
Other operating expenses
     7,673       —       —       —       7,673  
Total operating expenses
     105,772       —       —       —       105,772  
 
                                        
OTHER INCOME/(EXPENSE)
     1,314       —       —       —       1,314  
 
                                        
NET INTEREST EXPENSE
     (5,906 )     —       —       —       (5,906 )
 
                                        
INCOME BEFORE TAXES
     86,464       —       —       —       86,464  
 
                                        
INCOME TAXES:
                                        
 
                                        
Federal
     28,239       —       —       —       28,239  
State
     5,914       —       —       —       5,914  
Total income taxes
     34,153       —       —       —       34,153  
 
                                        
NET INCOME
   $ 52,310       —       —       —       52,310  
 
                                        
AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING:
                                        
 
                                        
Basic
     77,965       —       —       —       77,965  
Diluted
     83,370       —       —       —       83,370  
 
                                        
EARNINGS PER SHARE:
                                        
 
                                        
Basic
   $ 0.67       —       —       —       0.67  
Diluted
   $ 0.63       —       —       —       0.63  
 
                                        
GROSS SALES (in millions):
                                        
 
                                        
Mutual funds
   $ 1,682       —       —       —       1,682  
Managed accounts–retail
     2,759       —       —       —       2,759  
Managed accounts -institutional
     3,398       —       —       —       3,398  
Closed-end funds
     296       —       —       —       296  
Total funds and accounts
   $ 8,134       —       —       —       8,134  
 
                                        
NET FLOWS (in millions):
                                        
 
                                        
Mutual funds
   $ 1,015       —       —       —       1,015  
Managed accounts-retail
     (547 )     —       —       —       (547 )
Managed accounts -institutional
     2,249       —       —       —       2,249  

 

 

                                         
    2007  
    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Total  
Closed-end funds
     316       —       —       —       316  
Total funds and accounts
   $ 3,033       —       —       —       3,033  
 
                                        
MANAGED FUNDS AND ACCOUNTS (in millions):
                                        
 
                                        
ASSETS UNDER MANAGEMENT:
                                        
Beginning of period
   $ 161,609       —       —       —       161,609  
Sales – funds and accounts
     8,134       —       —       —       8,134  
Dividend reinvestments
     103       —       —       —       103  
Redemptions and withdrawals
     (5,204 )     —       —       —       (5,204 )
Total net flows into funds and accounts
     3,033       —       —       —       3,033  
Appreciation/ (depreciation) of managed assets
     1,453       —       —       —       1,453  
End of period
   $ 166,095       —       —       —       166,095  
 
                                        
RECAP BY PRODUCT TYPE:
                                        
 
                                        
Mutual funds
   $ 19,584       —       —       —          
Closed-end funds
     53,091       —       —       —          
Managed accounts-retail
     58,713       —       —       —          
Managed accounts - institutional
     34,707       —       —       —          
Total assets under management
   $ 166,095       —       —       —          
 
                                        
RECAP BY MANAGER:
                                        
Nuveen
   $ 79,430       —       —       —          
NWQ
     36,277       —       —       —          
Rittenhouse
     3,333       —       —       —          
Santa Barbara
     4,583       —       —       —          
Symphony
     8,953       —       —       —          
Tradewinds
     33,518       —       —       —          
Total assets under management
   $ 166,095       —       —       —          
 
                                        
RECAP BY STYLE:
                                        
Equity-based
   $ 85,531       —       —       —          
Municipals
     64,519       —       —       —          
Taxable income-oriented
     16,045       —       —       —          
Total assets under management
   $ 166,095       —       —       —          
 
(1)   Advisory fee revenue will fluctuate based on the number of days in the quarter — In 2007, Q1 has 90 days, Q2 has 91 days, Q3 and Q4 have 92 days.