Nuveen Investments has moved to fill the vacant spots left by the departure of Jeffrey Maillet and his team of seven, prompting speculation from the market on what direction the firm's loan effort will take. Four managers from Symphony Asset Management, a company acquired by Nuveen earlier this year, will now manage the loan funds. The Symphony team to this point has been focused mainly on fixed-income, fueling speculation that Nuveen is not totally committed to the loan market. "Nuveen is looking to de-emphasize the funds, and rumblings are Maillet was looking for an organization that wants to commit to the loan area, while Nuveen has concerns over the credit quality of [loan] paper," said an industry analyst. Another loan salesperson laughed at the notion of Nuveen de-emphasizing the loan business.
Nuveen Senior Income Fund is one of the worst performers in the loan world, having lost 7.9% this year. Laurel O'Brien, a spokeswoman, said Maillet and his team indicated they would be leaving at the end of August, and Oct. 26 was their last day. The spokeswoman said the loan funds would "categorically" continue and are still a useful asset tool positioned within a portfolio. "It is also true that Nuveen has been pushing money market and muni-bond funds, though," she added. Calls to Maillet were answered by his personal assistant Eileen Reeves, who declined all comment on where the team was heading. Market sources said Maillet has yet to land in a new spot.
Deepak Gulrajani, director of fixed-income strategies for Symphony, will oversee the new team. Day-to-day management of the Nuveen Senior Income Fund and the Nuveen Floating Rate Fund will be done by Gunther Stein, who in a previous incarnation was a high-yield portfolio manager at Wells Fargo Bank, where he managed a team of credit analysts and was responsible for loan funds. Stein currently manages more than $1 billion in high-yield bonds for Symphony, said the spokeswoman. Geoffrey Gwin and Lenny Mason are the other portfolio managers, she added.
The Nuveen loan funds common assets total $490 million. It held more than $7 million worth of a loan to Arch Wireless, which has defaulted. There is also a 7.2% sector concentration in hotels and gaming, including a 2.3% holding in Wyndham International.