Nuveen gets new muni bond leader amid lawsuit settlement

Nuveen has appointed a new head of its $188 billion municipal finance business as its longtime leader, John Miller, retires.

The news came as the firm announced a settlement with high-yield muni bond investor Preston Hollow Community Capital, which had filed two lawsuits against Nuveen beginning in 2019, one of which also named Miller as a defendant. Preston Hollow alleged that the company conspired against it in violation of the Sherman Act and pegged its potential damages at $100 million.

Succeeding Miller in the role of head of municipals is Daniel Close, 47, who most recently headed the firm's $35 billion taxable municipals business, which the company credits him with helping to establish and expand. As a result of the leadership shakeup, portfolio managers are being added to 10 of Nuveen’s muni bond funds, including its $17.7 billion High Yield Municipal Bond Fund and $4.8 billion All-American Municipal Bond Fund.

LAWSUITS

Allegedly, Nuveen urged muni bond underwriters and broker-dealers not to sell the entirety of an issuance to Preston Hollow, which restricted the latter company’s ability to buy bonds. Buying full issues was Preston Hollow’s business model, which complicated Nuveen’s ability to buy portions of issuances, according to court records.

As part of the lawsuit, Preston Hollow filed a claim of tortious interference with prospective business relations against Miller, whom it alleges communicated, along with subordinates, with major broker-dealers in the muni bond market to “organize a boycott of Preston Hollow,” according to the most recent amended complaint.

The companies didn't disclose terms of the settlement, but Nuveen is “also making an investment in PHCC, becoming a significant minority investor,” according to the announcement.

"This timely and targeted investment by Nuveen in PHCC signifies a new era of cooperation between our firms,” PHCC CEO Jim Thompson said in the announcement. “We're looking forward to a mutually productive relationship that will benefit not only our two firms but the broader municipal finance market as well."

Nuveen did not comment on the terms of the settlement but provided a statement on Miller’s departure.

“John has decided to retire after a tremendous career including nearly 30 years at Nuveen,” a company spokesperson wrote. “The long-established transition plan sets the team up to ensure continuity of the processes that they have established over the course their decades spent working together and positions them to continue delivering the investment excellence for which they’re known. This transition comes at the perfect moment and we appreciate all that John has done.”

NEW LEADER

Miller, who has been with the firm for nearly three decades, will continue to serve as a portfolio manager at the firm until June 1, the company said Monday in an announcement of the change.

The new leader, Dan Close, has worked for Nuveen since 2000. Prior to joining Nuveen, he worked at Banc of America Securities beginning in 1998 as an analyst.

The municipal finance team Close now oversees at Nuveen includes more than 80 employees, the firm stated.

Miller has been with Nuveen since 1996 and has led its municipals investment team since 2007.

"I am deeply grateful for my years at Nuveen and retire with a profound sense of pride in all that our dedicated and extremely talented team accomplished," Miller said in the company’s announcement. "Nuveen's municipal business is incredibly resilient and well-positioned to capitalize on the many opportunities that lay ahead.”