Earlier this month, Nuveen Asset Management revealed that its Chief Equity Strategist and Senior Portfolio Manager Bob Doll will be taking on a new slate of equity funds including traditional, specialty and alternative funds.
The task of transforming Nuveen Investment's largest asset management affiliate into a diversified equities shop now rests upon the shoulders of the former BlackRock chief equity strategist who joined the firm last November.
Going forward, Doll will manage six new funds including Nuveen Large Cap Core Fund (NLACX), Nuveen Large Cap Growth Fund (NLAGX), Nuveen Core Dividend Fund (NCDAX), Nuveen Concentrated Core Fund (NCADX), Nuveen Large Cap Core Plus Fund (NLAPX) and the Nuveen Equity Market Neutral Fund (NMAEX).
Doll will also manage three funds recently transitioned to him including Nuveen Large Cap Value Fund (NNGAX), Nuveen Growth Fund (NSAGX) and the Nuveen Equity/Long Short Fund (NELAX).
"It was definitely the plan; my willingness to join was contingent upon two things," Doll said. "One, that I manage large-cap U.S. money because I think that makes me a better student and articulator about markets. And two, to be an equity strategist and be able to communicate...about what's going in the markets."
Last November, Doll exited his cushy retirement to get back into the equities game at the Chicago-based firm after a five month hiatus. Prior to the brief stint on the sidelines, Doll spent 34 years at New York-based BlackRock-the investment management and advisory business with nearly $4 trillion in assets under management-where his equity stratagem was trusted in market circles.
Most notably, his "Ten Predictions" series helped to catapult Nuveen's name into primary equity circles in January. While his calls were 60% correct in 2012 under BlackRock's umbrella, the jury is still out on his 2013 predictions. Some predictions pointed to Europe exiting its recession, emerging markets outperforming developed counterparts and the U.S. economy muddling through for the seventh year in a row.
The well-known market commentary series, according to the new Nuveen Chief Equity Strategist, helps to prop up his ability to manage large-cap strategies.
"I need to be out there talking about markets and managing money." Doll said. "I have done large-cap U.S. all my life, and really nothing else from a money management standpoint, because...large-cap is arguably the largest category for U.S. investors."
According to Nuveen's President Bill Huffman, the master plan is to support the firm's multi-asset class growth, which totaled some $14.7 billion in assets as of the end of last year. Nuveen's fixed income assets totaled $104 billion.
"We already had a strong equity team and process, and we brought in Bob as an additional portfolio manager and equity strategist to be a catalyst," Huffman said, while noting that "what we've brought for so many years in munis we wanted to bring in equities."
Outflows from muni mutual funds accounted for about $920 million for the week that ended July 2, according to Investment Company Institute figures. Over June, munis had roughly $17.4 billion siphoned by investors.
Cerulli Associates Associate Director Alec Papazian noted that having a diversified product lineup can help a manager such as Nuveen garner some attraction. He added "some of the flows coming out of munis over the past month shows how you can benefit when you have equities as a part of that."
"The bar for active managers, especially when it comes to large-cap equities, is much higher than it was in the past with the increased competition from passive investing and indexing," said the research and data analysis firm's associate director. "I think their [Nuveen Asset Management's] main motivation is that they want to be seen as a provider that can offer a variety of investments."
Doll is expected to marry the firm's quantitative and fundamental analysis with the new fund coterie, according to David Chalupnik, its head of equities.
"The process at Nuveen, prior to Bob joining, is really the exact same process Bob had back at BlackRock and Merrill Lynch, so that becomes very attractive for Bob to kind of plug in," the equities head noted. "So what we do and what Bob does is we have quantitative and a fundamental analyst group plus the portfolio managers that really vet out these ideas."
But will the famed equity manager burn out from the nine portfolio duties? No. In fact, he said the task will be as easy as pie because "it's the same investment process."
"I've managed multiple strategies all my career, and I'm not concerned because it's one investment process," Doll explained. "I say to people, if I had two products, with different investment processes, that would be a lot more work than nine products with one investment process."
All nine strategies maintain three core themes: free cash flow, overweight in cyclical and underweight in defensive areas, and trying to get as much earnings exposure in the U.S. as possible, according to Doll.
The sky's the limit for the equity platform, which is targeted to be as large as its competing muni offering, Huffman said.
"We have $100 billion in munis and want to be $100 billion in equities at some point. We have the team, plus the portfolio managers including Bob, and the performance to do that," he said.
In order for this to happen, both Doll and Huffman agree that a nine fund suite needs to see substantial pickup from the retail business, financial advisors, institutional representation, sub-advisory, and retirement plan platforms.
"The ability to bring money in the door will depend on how good is our performance, how good is the equity market and how good are we in our distribution system in getting the word out and finding opportunities and meeting needs."
Huffman added that there are "a lot of financial advisors and clients who Bob has made a lot of money for in his career, and they like him, and they like the way he manages money, and so we have high expectations his performance will be strong and clients will want to be in his product."