TIAA-CREF Trust Company, FSB
Private
About TIAA-CREF Trust Company’s Private Asset Management
TIAA-CREF Trust Company provides Private Asset Management, estate planning and fiduciary services for individuals, families, foundations and other institutions, managing a total of more than $6 billion* in assets. We have a clear and long-held commitment to serving the financial best interests of those in the academic, governmental, medical, cultural and research fields.As part of the wealth management arm of TIAA-CREF, Private Asset Management is our premier investment management service for individuals who need a trusted professional advisor to create a customized investment portfolio that addresses multiple financial goals and complex financial needs. For over a decade, we have been helping our clients throughout the United States achieve their financial goals, including:
Managing your portfolio to address the complexity of multiple financial
goals — short- and long-term
Designing a portfolio that seeks to provide more consistent returns and
preserve capital by managing downside risk in volatile markets
Aiming to minimize the impact of taxes and investment fees
Our asset management approach is driven by a disciplined, time-tested research process, personalized through a one-on-one relationship to meet your distinct needs.
Table of contents
A personal level of service for
your unique financial situation
No two people are alike. Your dreams are yourown. But one common concern you share with others is the risk of losing the financial ability to achieve those dreams. Whether you’re focused on the needs of your family, a business or foundation, we understand that as wealth increases, so does the complexity of wealth management.
You need to organize your investments to address differing priorities and multiple
When you meet with your Portfolio Manager, your one-on-one relationship
will be very personal, supporting the depth of trust and understanding
you might have with a local financial advisor. Your Portfolio Manager is
highly skilled in designing custom portfolios, but also collaborates closely
with a specialized group of more than a dozen investment analysts. This
team approach focuses on identifying better investment opportunities
and sophisticated risk management strategies to support our clients’
long-term goals through changing market and economic conditions.
Addressing your unique needs
Your Portfolio Manager will dig deep to uncoverthe range of goals you envision over different time spans for you, your family, and future generations. You’ll discuss your long-term objectives for priority goals, whether retirement income, college funding, charitable giving or estate planning. Your time horizon for each of these goals and your need for asset preservation will guide your Portfolio Manager in constructing a portfolio tailored for you. Each investment we select for your portfolio is designed to support one of your needs. You’ll receive a customized portfolio not just for the future you envision for yourself, but also for loved ones for generations to come.
With a detailed understanding of your goals, we’ll assemble a team of professionals whose expertise is dedicated to portfolio management and your best interests. You will never be a number to us. Your complex needs require highly specialized knowledge in a number of areas, including trusts and estate planning, tax-efficient investing, or everyday account management. To ensure a completely integrated approach, your Portfolio Manager will coordinate your financial information with any external managers, accountants and attorneys who may serve you. On an ongoing basis, you’ll have a
Minimizing the impact
of market volatility
At Private Asset Management, our investment philosophy stresses the importance of risk management, particularly keeping a long-term perspective. But given increasing market volatility, you need an effective strategy that over time will enable you to reach your goals. That’s why, in managing risk, we emphasize a more advanced approach to asset allocation. Our research group has developed innovative allocation models exclusively for our clients, based on expected portfolio performance under thousands of different economic and market scenarios. These research-driven allocations provide more ways to diversify than do
traditional approaches, to help reduce reliance on stocks and seek improved consistency of returns over time. For instance, we can consider diversifying your portfolio with fixed-income investments that have the potential to perform like stocks, but fluctuate less in price, such as emerging market debt, inflation-linked bonds, and high-yield bonds. Our advanced approaches to asset allocation and portfolio construction are designed to help:
Improve overall risk-adjusted returns and
manage downside risk
Enhance overall portfolio diversification Improve downside risk posture in extreme
market environments, especially for clients relying on regular income distributions We believe that over the long term our asset allocation approach to managing downside risk will be essential for reaching your goals.
The upside of the downside
In this example, both portfolios begin with an initial investment of $100,000 and had an average annualized return of -2.5% over two years. Portfolio A outperforms in year 1 of an up market and Portfolio B outperforms in year 2 of a down market. Looking at average returns, you might conclude that these portfolios performed the same. But did they? Portfolio B is worth $1,500 more than Portfolio A. Why? Because Portfolio B outperformed during the down market, rather than the up one, it lost significantly less of its first-year gains than did Portfolio A. This is why we believe that managing downside risk is so critical to your portfolio over the long term.
This illustration is not intended to depict the performance of any specific investment or account. Past performance is not indicative of future returns.
A tale of two portfolios
Same Average Annualized Return, But Different Ending Values
0 Initial Investment 40000 Portfolio A Portfolio B 80000 120000 $100,000 $115,000 (+15%) $92,000 (–20%) (+10%) (–15%) $100,000 $110,000 $93,500
Year 1 Ending Value Year 2 Ending Value 0 Initial Investment Year 1 Year 2 40000 Portfolio A Portfolio B 80000 $100,000 +10% –10% $100,000 $115,000 (+15%) $92,000 (–20%) (+10%) (–15%) $100,000 $110,000 $93,500
Year 1 Ending Value
Year 1 Year 2 Avg Annual Return Total
Portfolio A 15% -20% -2.5% $92,000
Portfolio B 10% -15% -2.5% $93,500
Disciplined research can
identify better investment
opportunities
After working with your Portfolio Manager
to create an appropriate asset allocation,
our research teams apply disciplined
evaluation and screening processes to
identify better investment opportunities.
Stocks: buying financially
sound companies
When investing in individual stocks is suitable for a portfolio, we research each stock as if we were buying the whole company. We conduct exhaustive fundamental research into how the company is financed and managed. We want to know if the company has a scalable business model, strong managers and a distinct competitive advantage.
As we seek to generate better-than-average market returns while minimizing fluctuations in portfolio value, our selection process focuses on the following:
Long-Term Value and Yield — Companies
selling for less than their actual long-term value and offering high free cash flow yields
Creating a Broadly Diversified
Portfolio of Stocks
Narrowing down the selection. Our investable universe consists of the top 1,000 stocks by market cap (number of shares times the share price). Screening and research narrow the universe to a buy list of 80 to 100 stocks. Final portfolios are made up of 40 to 60 holdings (large-cap and mid-cap stocks benchmarked to the Standard & Poor’s 500 Index).
risk-Fixed income: actively managing
portfolios and risk
Our disciplined investment process focuses on delivering consistent long-term performance while preserving capital through stringent risk management. Economic analysis and interest rate trends contribute to a dynamic economic outlook that guides strategic portfolio composition.
To help provide the most value possible, we apply distinct approaches to taxable and tax-exempt bonds, offering separate strategies to address your investment needs.
Taxable Fixed-Income Investments
Our fixed-income team works with your Portfolio Manager to:Preserve capital through credit due diligence
and active oversight of securities
Use investment-grade securities to create
Minimize portfolio fluctuations by selecting
maturities of less than 10 years, and keeping the average maturity of a portfolio within three to five years
Strategically adjust the portfolio to take
advantage of yield curve trends and sector opportunities
Tax-Exempt Fixed-Income
Investments
Our fixed-income team works with your Portfolio Manager to:
Take advantage of inefficiencies and
anomalies within municipal bond markets
Preserve capital through active, ongoing
management of credit exposures
Select high-quality bonds in less volatile
Mutual Fund and ETF Universe (4,700 funds)
We focus on the share class with the longest history
Core List
Consists of the top 25 percent of funds in quantitative evaluation
Stringent due diligence in
selecting mutual funds
Pairing Managers for Up and Down Markets
The goal is to help reduce your downside portfolio risk with our Manager Pairing Strategy — when appropriate for your investment objectives.
Overview
We identify investment
managers with a demon strated record of consistently outperform-ing their peers in falloutperform-ing markets and those who outperform their peers in rising markets.
We believe the pairing
of managers outperform-ing in different market cycles helps reduce volatility and increases the likelihood of out-performing a benchmark index over a full market cycle.
Client risk thresholds
determine the percent-age exposure to the two types of managers in each asset class and
Overview of how we build
your customized portfolio
Customized
Portfolio
Step 1
Establishing your goals and account type
Once we understand your unique needs and review your current portfolio, risk profile and other information, we will:
Develop your investment objectives Write your Investment Policy Statement
Set up the appropriate account type: Trust, IRA, agency, or other Establish accounting procedures and sub-accounts, if required
Step 2
Creating your asset allocation
Based on your investment objectives, risk profile and tax considerations, our research area will:
Align your needs with one of our many asset allocation strategies
Provide detailed recommendations on allocating your portfolio among equities,
fixed income, cash, and alternatives within those asset classes
Step 3
Constructing your portfolio
Your dedicated Portfolio Manager builds your custom portfolio by personally selecting investments within each asset class, taking into account your preferences for socially responsible investments, active vs. passive management, and tax efficiency. Investments can include:
Mutual funds and ETFs — from those on the approved list — that best meet
your unique needs, objectives and preferences
If appropriate, individual stocks or bonds selected by our equity and fixed-
income teams
Step 4
Ongoing risk management, review and more
Designing the right solution — together
Type of Client and
Need
Entrepreneur
Long-term financial planning with self-employed income
Shifting to Retirement Income
Shifting from accumulation to building a distribution planEstablished
Managing financial needs in retirement
Philanthropic
Board member managing a foundation or endowment
Example Martin Albertson Age: 46
Occupation: Entrepreneur and Business Owner
Family: Married with three children (ages 3, 10 and 16) Prior TIAA-CREF relationship: none
Lydia Haden Age: 55
Occupation: Professor
Family: Married with two grown children Prior TIAA-CREF relationship: retirement plan participant
David Hershey Age: 70
Occupation: Retired Physician
Family: Married with grown children and grandchildren Prior TIAA-CREF relationship: retirement plan participant
Margaret Brown Age: 68
Occupation: Retired Hospital Administrator; Currently serves as board member for hospital’s endowment Prior TIAA-CREF relationship: retirement plan participant and HR benefits supervisor for hospital retirement plan
Financial Details Current income: $300,000
Portfolio size: $3.5 million (not including business interests)
Current income: $150,000 Portfolio size: $1.2 million
Current income: $200,000 Portfolio size: $10.2 million
Endowment managed by hospital board: $20 million
Financial Needs Martin and his wife:
Invest self-employed income for retirement Save enough for college tuition for three children Consider taking more risk in exchange for
long-term growth
Lydia and her husband:
Manage accounts with several
different investment firms
Provide income to maintain two
homes in retirement
Gain comprehensive perspective on
all their assets
David and his wife:
Coordinate investments with estate and legacy
planning
Establish trustee relationship to manage portfolio
if incapacitated
Establish trust accounts to pay for grandchildren’s
education
Foundation:
Better risk management following losses in bear
market
Revise investment policy and improve returns to
support 4% annual spending commitments
Portfolio Manager Solution
Martin and his wife have more than enough current income to assume additional risk using this approach:
Aggressive allocation to equities. Individual
stocks selected for large- and mid-cap allocations, supplemented by mutual funds, ETFs, and long/short funds
Lydia consolidated 100% of family assets in a customized portfolio using this approach:
Long-term conservative allocation
using mutual funds and ETFs to provide substantial fixed-income
The Portfolio Manager for David and his wife works with Trust Company specialists to establish:
Investment Advisory Account enabling David and
his wife to stay involved in investment decisions for as long as they’re able
Long-term, moderately aggressive allocation
Based on income and spending concerns, board should set up long-term, moderate allocation as follows:
Taxable portfolio of individual bonds, supplemented
with high-yield and emerging market debt, to meet spending requirements
Create an equity portion made up of individual
Type of Client and
Need
Entrepreneur
Long-term financial planning with self-employed income
Shifting to Retirement Income
Shifting from accumulation to building a distribution planEstablished
Managing financial needs in retirement
Philanthropic
Board member managing a foundation or endowment
Example Martin Albertson Age: 46
Occupation: Entrepreneur and Business Owner
Family: Married with three children (ages 3, 10 and 16) Prior TIAA-CREF relationship: none
Lydia Haden Age: 55
Occupation: Professor
Family: Married with two grown children Prior TIAA-CREF relationship: retirement plan participant
David Hershey Age: 70
Occupation: Retired Physician
Family: Married with grown children and grandchildren Prior TIAA-CREF relationship: retirement plan participant
Margaret Brown Age: 68
Occupation: Retired Hospital Administrator; Currently serves as board member for hospital’s endowment Prior TIAA-CREF relationship: retirement plan participant and HR benefits supervisor for hospital retirement plan
Financial Details Current income: $300,000
Portfolio size: $3.5 million (not including business interests)
Current income: $150,000 Portfolio size: $1.2 million
Current income: $200,000 Portfolio size: $10.2 million
Endowment managed by hospital board: $20 million
Financial Needs Martin and his wife:
Invest self-employed income for retirement Save enough for college tuition for three children Consider taking more risk in exchange for
long-term growth
Lydia and her husband:
Manage accounts with several
different investment firms
Provide income to maintain two
homes in retirement
Gain comprehensive perspective on
all their assets
David and his wife:
Coordinate investments with estate and legacy
planning
Establish trustee relationship to manage portfolio
if incapacitated
Establish trust accounts to pay for grandchildren’s
education
Foundation:
Better risk management following losses in bear
market
Revise investment policy and improve returns to
support 4% annual spending commitments
Portfolio Manager Solution
Martin and his wife have more than enough current income to assume additional risk using this approach:
Aggressive allocation to equities. Individual
stocks selected for large- and mid-cap allocations, supplemented by mutual funds, ETFs, and long/short funds
Portfolio of individual bonds provides limited
fixed-income exposure to diversify risk
Lydia consolidated 100% of family assets in a customized portfolio using this approach:
Long-term conservative allocation
using mutual funds and ETFs to provide substantial fixed-income exposure across corporate and government bonds in the United States and abroad
Exposure to growth-oriented equity
mutual funds to pursue principal
The Portfolio Manager for David and his wife works with Trust Company specialists to establish:
Investment Advisory Account enabling David and
his wife to stay involved in investment decisions for as long as they’re able
Long-term, moderately aggressive allocation
to pursue asset growth for the benefit of children and grandchildren
Trusts for grandchildren’s education managed
as a single portfolio using same strategy
Based on income and spending concerns, board should set up long-term, moderate allocation as follows:
Taxable portfolio of individual bonds, supplemented
with high-yield and emerging market debt, to meet spending requirements
Create an equity portion made up of individual
Benefits of TIAA-CREF
Private Asset Management
Whether your desire is to leave a legacy for yourchildren, grow your foundation’s endowment, or meet your income needs in retirement, Private Asset Management can offer the solutions you need and the service you deserve.
You can only reach your unique goals when you have a plan that’s tailored for you and designed for the long term by helping to manage downside risk. Our level of ongoing personalized attention assures that:
Your dedicated Portfolio Manager addresses
your multiple goals by keeping the portfolio aligned with your long-term objectives, risk tolerance, the time you’ve set to reach each goal, and tax sensitivity.
Our seasoned research teams identify
an effective asset allocation strategy and selection of investments, based on collaboration with your Portfolio Manager.
Our risk management approach
incorporates advanced asset allocation to help reduce losses during periods of economic uncertainty and market volatility.
Investment fees are exceptionally
