A second round of layoffs in TIAA’s outsourced chief investment officer business is slated to take place this week, according to one former staffer.
TIAA announced in November that it was shutting down its OCIO unit, which at the time managed about $3.2 billion in assets for seven clients. TIAA said the closure would happen in phases.
Layoffs began in January, affecting salespeople and the support team, according to the former staffer. This week, the investment staff is set to learn their fate.
Some, according to the source, will remain on until clients are able to move their assets to another provider, which could take months. Among those clients is the Medical College of Georgia Foundation, which hired TIAA to manage its assets in August 2018, Institutional Investorreported at the time. “You have to have people on the investment team there until the last dollar is out the door,” the source said. “Candidly I think a few people will be around 2021.”
Others will be let go this week. Despite the possibility of a hefty payout, the source said some employees want to leave sooner rather than later. “They are being held hostage a bit,” the source said. “Some people have said they want to be a part of the next wave.”
A TIAA spokesperson said via email Monday that the firm is taking a phased approach to exit the OCIO business “in order to facilitate a smooth transition for clients.” “While we believe this is the right decision for our business, eliminating roles is never a decision we take lightly, and we appreciate our employees’ continued client focus and patience during this period,” the spokesperson said. “We are, and continue to be, committed to communicating to impacted associates as transparently and quickly as we can, while at all times helping them successfully navigate this transition.”
According to the source, “about a dozen” OCIO businesses said after TIAA announced that it was closing its OCIO arm that they would have been interested in acquiring the group.
[II Deep Dive: Invesco Is Shopping Around for an OCIO Business]
TIAA was approached by Invesco about an acquisition after the firm announced that it was shuttering its OCIO business, the source said.
The two engaged in deal discussions, and while there would have been location synergies between the two: both have offices in Houston, a deal never came to fruition, the source said. An Invesco spokesperson declined to comment on the matter.