Core strength: Inside TIAA’s $294 billion investment engine.

What you'll get from this article

• Emily Wiener, chief investment officer for the TIAA General Account (GA), talks about how she manages a $294 billion portfolio (as of Dec. 31, 2023) on behalf of millions of people.
• The GA is invested primarily in fixed income aimed at steady growth, diversification and safety.
• Strong underpinnings enable the GA to invest in alternative assets, such as low-income housing in the U.S., to encourage better risk-adjusted returns.

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One of the most powerful women in asset management got an auspicious start in the business of financial security—but not in the way you might expect.

A teenage Emilia “Emily" Wiener cut her teeth inside the bill-counting “cash cage” at her local Kmart in Long Branch, New Jersey. It was an eye-opening glimpse at the responsibility of handling stacks of money, and an early sign of her affinity for numbers.

“My father, God bless him, marched me into Kmart and said: ‘She needs a job,’” Wiener says. “So they gave me a math test and put me on the cash registers. Before long they said, ‘Oh: she's going to the cage.’” Hours were long, dinners were eaten during short breaks and homework awaited after clocking out.

Fast forward to today and Wiener is the chief investment officer for TIAA's $294 billion GA, the investment engine that paid out more than $5.7 billion in retirement income to clients in 2023. She joined TIAA as head of fixed income for the GA in 2016. Over a 30-year investment management career, Emily has spent much of her time specifically managing insurance company investment portfolios.

TMRW checked in with Emily at a time when many market commentators believe the U.S. Federal Reserve may be finished raising interest rates after a historic flurry of hikes that began in early 2022. We chatted with her about how the GA is managed, what’s next for the U.S. economy and how first jobs can help shape careers.

Thanks for chatting with us, Emily. For starters, can you give a high-level overview of the GA’s approach? What are you trying to accomplish?

The GA is specifically built around delivering lifetime income through TIAA Traditional,¹ our flagship fixed annuity product for 403(b) plans. In recent years, the GA also has begun to support lifetime income in 401(k) plans where more workers are gaining access to such products, in many cases for the first time.

We are a liability-driven investor, so we focus on generating predictable, stable and recurring income from our investment portfolio to provide participants access to lifetime income.

Uniquely, TIAA can pass on additional crediting rates and dividends to our participants after we pay our minimum guaranteed rates, expenses and outlays. TIAA has credited above minimum rate guarantees every year for over 70 years, a streak made possible through careful portfolio construction and diligent capital management.²

What’s inside the GA’s portfolio?

We maintain a highly diversified, multi-strategy and global portfolio. Broadly speaking, about 85% of the GA portfolio is invested in fixed income strategies to produce stable, predictable and recurring income through scheduled coupon interest payments.

Our anchor allocations within fixed income are investment-grade securities, both public and private, and high-grade commercial mortgages. We also include allocations to high-yield fixed income, structured credit and what can be considered “safe haven” assets such as U.S. Treasuries.

Our strategy is to maximize risk-adjusted returns within our risk appetite and we invest with the intention of holding to maturity. We don't actively trade the portfolio to beat any total return benchmark. We proactively manage risk to minimize credit losses and to deliver sustainable and predictable investment income.

How does the GA invest the remainder of the portfolio, the other 15% that isn’t in bonds or commercial mortgage loans?

One thing that sets TIAA’s GA apart is that we have one of the largest capital bases in the industry, meaning we have a financial surplus well in excess of our liabilities. This financial underpinning, combined with the inherent stability of our liabilities, earns TIAA one of the highest credit ratings among U.S. insurance companies.³

This positioning allows us to dedicate a higher allocation to alternative investments than many of our insurance company peers. Alternatives can offer opportunities for diversification and higher long-term risk-adjusted returns not available in traditional markets.

To that end, we generally hold around 15% of the GA portfolio in real estate equity, private equity and real assets including timber, infrastructure and farmland—think almonds, pistachios and grapes used for wine from Napa, Monterey, Sonoma and Madera counties in California. In real estate, we recently invested in housing opportunities for low-income residents across the U.S. as part of our impact investing strategy. There are many other examples.

We’ve been able to do this and maintain our strong financial risk profile by leaning into the deep expertise of Nuveen, TIAA’s wholly owned asset management subsidiary.

Let’s talk about interest rates, which have been top of mind for so many people. What have higher interest rates meant to the GA portfolio?

Rising interest rates generally benefit the GA as we can reinvest new money flows and portfolio turnover at higher interest rates for the ultimate benefit of our participants. Because interest rates had been so low for so long, the rise in market rates has been a welcome reprieve in our work to support participants with strong crediting rates.

Higher rates can also tap the brakes on economic growth—what are you watching in the U.S.?

For most of 2023, higher rates did not translate into slower economic growth. Crystal balls are often unreliable, particularly in a U.S. presidential election year. With that caveat, my view is that growth will likely slow in 2024 as the full effects of the rapid rise in rates work through the system. Inflation should moderate and move toward the Fed’s policy target of about 2%.

But I do not anticipate a slowdown or even a mild recession would result in a meaningful pivot by the Fed toward pronounced easing, despite some recent speculation about the potential for multiple rate cuts in 2024. I believe the Fed will want evidence that inflation is sustainably at its target before changing course on rates, and I think this evidence may prove elusive in 2024.

We’re also watching commercial real estate, which is clearly in a downcycle, where a lack of liquidity is impacting valuations. Corporate balance sheets remain relatively strong but the impact of higher rates is not yet fully reflected and we expect companies that borrowed the most to come under some stress.

Remember that TIAA’s portfolio is mostly made up of investment-grade bonds without significant credit concerns. We work closely with Nuveen to detect early signs of credit stress and take appropriate defensive actions. Our disciplined risk framework and financial strength ensure our ability to weather downturns and allow some room to take advantage of market dislocations—buying when others are selling.

You’ve been thinking a lot about how to position the GA with regard to the risks and opportunities associated with climate change.

Our obligation to TIAA retirement plan participants is long term, which means it is our responsibility to consider investment risks—including climate risks—over a similarly long horizon.

Financial markets will eventually price in the risks of climate change, so the GA is taking steps to manage climate risks in the portfolio and seek opportunities to invest strategically in solutions addressing climate change.

What actions has the GA has taken to address the climate challenge?

Starting in 2022 we developed and continue to refine a set of core climate beliefs to help guide decision-making around climate risk in the GA. These build on our plan to significantly reduce the carbon intensity of the GA’s investments, consistent with the global transition to a low-carbon economy and our commitment to work toward net zero by 2050.

Through hard work with Nuveen, the GA remains on track to meet TIAA’s 2025 interim carbon intensity targets for public corporate debt and direct real estate. I’d urge anyone interested in reading more about our strategies related to climate to read the 2023 TIAA Climate Report.