Asia is a strategically important market, according to Vijay Advani, the newly appointed executive chairman of Nuveen, the investment manager of the Teachers Insurance and Annuity Association of America (TIAA).
Advani told The Asset on his recent visit to Singapore that his drive to build relationships across the region was now paying dividends.
“We can now walk into most countries in Asia and offer solutions. Rather than be a product-focused organization, we can say, ‘let's sit down, see what your concerns are, what are your needs, what are your liabilities,’ and then offer you a solution rather than a product,” Advani says.
Currently the CEO of Nuveen, Advani will take on the augmented role of executive chairman in January 2020. Nuveen has more than US$1 trillion in assets under management as of September 30 2019 and operations in 24 countries.
The enhanced position will allow him to focus on three key growth areas: impact and ESG investing; growing Nuveen’s business and investment capabilities outside the US; and the further development of its fintech arm, Nuveen Labs.
While his firm posted positive organic growth in 2018 amid industry outflows and is on pace to do better this year, Advani’s present role sees him focus on initiatives that will expand opportunities for clients and the firm over the long term.
In recent years, he has overseen a streamlining of the US$1 trillion asset manager which entailed centralizing operations such as cybersecurity, risk, distribution and compliance.
A positive side effect that emerged from that move is that it allowed Advani more space to focus on international expansion.
“Over the last two years, we've slowly started having feet on the ground in Asia, Europe, Middle East, North Africa, Canada and Latin America. Here in Asia, we are actively pursuing business in Japan, Taiwan, Hong Kong, China, Singapore, Malaysia, and the list goes on,” he says.
Advani, who spent time in Asia in an earlier career role, understands the region is far from a homogeneous market and that needs, demands, regulations and requirements are different from country to country.
Having previous expertise in industries such as timber and agriculture, the current dominant theme of sustainable and green investing in Asia is welcomed by Advani.
“Nuveen, and TIAA, in particular, has been an ESG investor for five decades. Our responsible investing leadership began with corporate engagement on anti-apartheid issues in South Africa in the 1970s. Today, we are one of the largest responsible investment managers,” Advani says.
“What we basically believe and I think society believes now is that you can't leave it all to governments. Asset owners, asset managers and companies play an important role in society as well. We currently have about US$5 billion in impact investing directly,” he adds.
There is no doubt that when it comes to ESG, investing with a purpose or sustainable investing - as Advani puts it, “the arrow has left the bow” - it is here to stay.
But the next phase of this development may be harder to define, he believes, and that is how to appropriately measure impact, because today it is not a science.
This was also a topic and issue that was discussed by several panels at The Asset’s recent Singapore summit.
“We as an industry need to take ownership of that. How do you measure impact? And is measuring also portable? So if you tell somebody in Australia, I've generated this amount of impact, can that also be understood in Europe and in the United States?” Advani says.
He is of the opinion that a lot of research and a lot of financial resources have to be put into creating benchmarks set against the United Nations Sustainable Development Goals (SDGs).
“The United Nations has the SDGs, but a lot of them are hard to actually measure on the ground. Everyone's doing it in a different way and the question is how do we, as an industry, have a standardized way to do it?” he says.
In his new role in January, Advani is planning to work internally, with other associations, and along with universities, on standardizing the measurement of impact investing. He intends to become a key player and a leader in rallying the industry together.
“If we don't do it as an industry, somebody else is going to do it. It will be a regulator, it will be some association and we need to take charge of it and say how are we going to self-regulate this so that we can stand up to the measurement of what we are intending to do,” adds Advani.