Philanthropist Andrew Carnegie has a vision for improving retirement security for college professors. Through annuities and low-cost life insurance, he pioneers a system to support the financial well-being of college teachers and establishes TIAA-CREF through his Carnegie Corporation of New York and the Carnegie Foundation.
The organization begins as a fixed income investor, and launches TIAA Traditional , a flagship, guaranteed income product that offers safety, stability — and a guaranteed paycheck through retirement.
Few guaranteed income products have stood the test of time as well as TIAA Traditional, which helps millions save for and enjoy a secure retirement.
TIAA makes its first annuity income payment of $10. Over the next 90 years TIAA-CREF pays participants $317 billion in annuity payments and other benefits.
From the beginning, TIAA has followed a prudent, long-term approach to investing — a strategy that enabled the organization to weather fluctuating market cycles and the Great Depression of the 1930s.
TIAA originates its first commercial mortgage and 13 years later, the organization begins direct investment in commercial real estate. Today, TIAA-CREF is one of the largest real estate managers of U.S. institutional tax-exempt assets.* Assets under management grow from $18.9 million in 1929, to $105 million in 1939. TIAA also begins to seek out other investments that could help fulfill the organization’s mission.
*Pensions & Investments. October 15, 2012. Rankings based on institutional tax-exempt assets under management as of June 30, 2011, reported by each responding asset manager.
In the decade leading up to the 1950s, holders of TIAA annuities faced skyrocketing inflation that almost halved the purchasing power of their annuity checks. After studying the problem, TIAA-CREF develops an innovative solution that adds common stocks for retirement savings and income.
In 1952, the world’s first variable annuity, now known as the CREF Stock Account, is introduced. Through a single investment, the CREF Stock Account enables TIAA pension participants to diversify retirement accounts with global equity exposure. For more than 60 years, the CREF Stock Account has helped clients reach long-term retirement savings goals.
TIAA-CREF believes that diversification of investments continues to be one of the best ways to achieve long-term goals like saving for retirement, and has consistently sought out those opportunities. Forward thinking is a key tenet of TIAA-CREF’s asset management philosophy, and a fundamental ingredient in delivering the solid investment outcomes clients have come to expect.
With a minor investment in a Japanese company in 1972, TIAA-CREF continues its pioneering spirit, becoming one of the first companies to use an extensive portfolio of international stocks as part of its investment strategy. Five years later, TIAA-CREF’s international investment program expands with investments in emerging markets.
The concept of social responsibility emerges and TIAA-CREF becomes one of the first institutional investors to engage in dialogue with portfolio companies on the topic. The organization actively encourages companies to pursue responsible corporate citizenship by:
In 1972, the organization leads the creation of the Investor Responsibility Research Center which provides impartial research on social issues within the scope of social investing.
TIAA-CREF introduces new products and programs, including the CREF Money Market Account that offers participants a high level of flexibility, and additional variable annuities. The organization’s responsible investing program grows and an affordable housing financing program is introduced in underserved markets nationwide.
In 1986, CREF Stock Account assets pass the $25 billion mark. Today, it is one of the largest U.S. investors in foreign stocks, with $2.8 billion invested in 12 major foreign markets.
The CREF Social Choice Account launches, and is one of the industry’s first blended stock/bond variable annuities to incorporate environmental, social and corporate governance (ESG) criteria into investment decision-making. The CREF Social Choice Account objective is to achieve positive, long-term financial outcomes through investments in public securities that also meet specific ESG criteria — providing investors the opportunity to align their values with investments.
TIAA-CREF achieves another milestone when total assets under management top $100 billion in 1991. As always, the organization continues to look for investments that benefit its participants.
The TIAA Real Estate Account is introduced, offering participants a vehicle for direct investment in commercial real estate, an asset class that typically is not widely available to individual investors.
TIAA-CREF makes its first investment in alternatives. A year later, total assets under management topped $200 million, and a retail mutual fund family featuring six funds is introduced.
TIAA-CREF makes its first investment in timber, focused specifically on acquiring, developing and managing timber assets located in target markets across developed and emerging economies.
On July 1, TIAA-CREF Asset Management makes its debut as the first new business development stemming from Chairman and CEO Herb Allison's enhanced commitment to providing "best of breed" client services and products.
Asset Management enables the organization to help meet the financial needs of nonprofit organizations, as well as those of new markets such as corporate and public fund defined benefit plans, and sovereign wealth funds.
The new Asset Management arm leverages TIAA-CREF’s:
Also introduced in 2004 are the TIAA-CREF Lifecycle Funds, a series of broadly-diversified funds uniquely structured with the goal of providing investors with longer than average income during their retirement years. The TIAA-CREF Lifecycle Funds leverage more than 60 years of asset allocation experience and aim to provide an effective and convenient tool for investors to prepare for and meet their retirement savings objectives.
Further deepening its commitment to responsible investing, TIAA-CREF creates a Social & Community Investing department. The group is formed to increase Asset Management’s focus on emerging environmental, social and governance (ESG) metrics — including management of development, enhancement, and oversight processes for ESG criteria used to establish investment universes for TIAA-CREF’s socially responsible investment products. The same year, the group also begins a $100 million Global Microfinance Investment Program.
The organization makes its first investment in agriculture, focused directly on farmland. TIAA-CREF believes farmland offers a more attractive risk/reward exposure in the production of food and fiber, as compared to listed securities or commodity futures.
Making its first investment in energy in 2009, TIAA-CREF becomes an active investor in oil and natural gas, recognizing that natural gas is one of the main sources of clean energy, and recently, the fuel of choice for building new power plants.
As a signatory to the Principals for Responsible Investment (PRI), TIAA-CREF joins a growing list of investment managers, asset owners and professional service partners around the world who have made a public commitment to adhere to and promote responsible investing.
The PRI, a global project in partnership with the United Nations Environment Programme Finance Initiative and the U.N. Global Compact, provides a framework for integrating environmental, social and governance issues into investment decision-making and ownership practices, with the goal of enhancing long-term returns for investors.
Endorsing the PRI affirms our values as an organization and underscores our goal of seeking to provide a safe and secure retirement for the individuals who have entrusted their savings to us. Such an approach is an integral part of how TIAA-CREF strives to meet the financial needs of the clients we serve.
TIAA-CREF launches a suite of five Lifestyle asset allocation funds that each targets a distinct level of risk and return. Capitalizing on broad investment capabilities, the underlying TIAA-CREF Funds selected for Lifestyle portfolios are diversified across asset classes, investment styles, and active management approaches.
In May, the organization launches TIAA-CREF Global Agriculture LLC, a global investment company dedicated to investing in global farmland. This innovative vehicle (PDF) is evidence of a new era in institutional investing. Sustainability plays a key role on this investment strategy, and prior to this TIAA-CREF, in concert with a group of institutional investors representing $1.3 trillion in assets, launches the Principles for Responsible Investment in Farmland (the “Farmland Principles”) with the goal of improving the sustainability, transparency and accountability of investments in farmland.
By the start of the year, TIAA-CREF achieves its goal to reduce energy intensity by 15 percent within its real estate portfolio. 2012 is a landmark year for TIAA-CREF in achievements toward socially responsible investing.
The TIAA-CREF Global Real Estate Sustainability Initiative (GRESI) is created to identify, evaluate, develop and implement best practices across all portfolio and property types. TIAA-CREF is named EPA Energy Star Partner of the Year for Sustained Excellence for the third consecutive year, in recognition of outstanding energy management practices and reductions in greenhouse gas emissions.
From the day it was founded in 1918, through December 31, 2011, TIAA-CREF has paid participants $317 billion in annuity payments and other benefits.* The balanced approach to building retirement assets pioneered by TIAA-CREF helped thousands of participants retire with financial security.
* As of December 31, 2011. Other benefits from TIAA and CREF include: Additional amounts paid on TIAA Traditional annuity contracts above the guaranteed rate, surrender benefits and other withdrawals, death benefits, health insurance and disability insurance benefits, and all other policy proceeds paid.
TIAA-CREF is recognized for strong investment performance and asset management expertise. Lipper names TIAA-CREF the 2013 Best Overall Large Fund Company, versus that of 35 other large investment managers, based on risk-adjusted performance for the past three years1, and is placed in the Top 10 for One-year Fund Family performance in the Barron’s/Lipper Fund Family Survey, ranking #10 out of 62 fund families based on one year asset-weighted total returns.2
1 In calculating the awards, Lipper considered funds registered for sale in the United States with at least 36 months of performance as of the end of the calendar year of the respective evaluation year. Fund groups with at least five equity, five bond or three mixed-asset portfolios were eligible for an overall group award. The award is given to the group with the lowest average decile ranking of three years’ Consistent Return measure of the eligible funds over the three-year period ended 11/30/12. TIAA-CREF was ranked against 35 fund companies.
2 TIAA-CREF ranked #10 among 62 fund families. The Lipper/Barron’s Fund Family survey uses an asset-weighted ranking system. Each fund’s return was measured against all those in its Lipper category, and the resulting percentile ranking was then weighted by asset size relative to the fund family’s other assets in its general category. The family’s overall ranking was then determined by weighting the five fund categories in proportion to their overall importance within Lipper’s fund universe. In the five-year overall ranking, TIAA-CREF is ranked 29th out of 53 mutual fund families. TIAA-CREF does not qualify for the 10-year ranking.
In March, the TIAA-CREF Center for Farmland Research at the University of Illinois is launched. The center enhances the university’s research and educational initiatives for students and the agricultural community, including investors, farmers, researchers and businesses.
Also in 2013, TIAA-CREF partners with Henderson Global Investors (“Henderson”) — one of Europe’s largest investment managers — to launch a new global real estate investment management company, TIAA Henderson Global Real Estate. The new company offers clients expanded investment opportunities in the global real estate market.
Please note, the target date for LifeCycle funds is the approximate date when investors plan to start withdrawing their money. The principal value of the fund(s) is not guaranteed at any time, including at the target date.
Diversification is a technique to help reduce risk. There is no guarantee that diversification will protect against a loss of income.
TIAA-CREF products may be subject to market and other risk factors. See the applicable product literature, or visit www.tiaa-cref.org. for details.