Nuveen, Prudential prep for new fund launches

Nuveen Investments Inc., the asset manager owned by Madison Dearborn Partners LLC, plans to start a fund to buy corporate debt, the firm said in a prospectus filed today with the U.S. Securities and Exchange Commission.
MAY 23, 2011
Nuveen Investments Inc., the asset manager owned by Madison Dearborn Partners LLC, plans to start a fund to buy corporate debt, the firm said in a prospectus filed today with the U.S. Securities and Exchange Commission. The Nuveen Short Duration Credit Opportunities Fund will invest at least 70 percent of its assets in adjustable-rate senior loans and second-lien debt. The fund may also purchase high-yield debentures and collateralized loan obligations, according to the filing. CLOs are a type of collateralized debt obligation that pool high-yield, high-risk loans and slice them into securities of varying risk and return. Nuveen Fund Advisors Inc. will determine and implement the investment strategy, while Symphony Asset Management LLC will be responsible for investing the fund's assets, according to the filing. Kathleen Cardoza, a Nuveen spokeswoman, declined to comment. Separately, Prudential Financial Inc., the second biggest U.S. life insurer, plans to start a mutual fund focused on buying leveraged loans. The Prudential Floating Rate Income Fund may invest up to 80 percent of its assets in loans and other floating-rate debt and intends to begin investing in March, according to a prospectus filed with the Securities and Exchange Commission on Jan. 11. “The fund may invest primarily in senior loans that are rated below investment grade or unrated senior loans of comparable quality,” the document said. Newark-based Prudential may use up to 20 percent of the fund's assets for buying unsecured loans, according to the filing. Darrell Oliver, a company spokesman, declined to comment. The new fund will be managed by Paul Appleby, Joe Lemanowicz and Brian Juliano, the document said. Prudential, which had about $750 billion of assets under management as of Sept. 30, oversees other loan investments through closed-end funds, including collateralized loan obligations. Leveraged loans are typically rated below BBB- by Standard & Poor's and less than Baa3 at Moody's Investors Service. MetLife Inc. is the biggest U.S. life insurer.

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