Jason Hernandez

“It’s better to be lucky than good,” has been a mantra for Jason Hernandez, but his five-year tenure at Nuveen has demonstrated he’s the latter (or, heck, maybe both). 

In a tumultuous year for the debt markets where illiquidity reigned supreme, Nuveen originated $5.2 billion across 48 credit investments, comprising $2.2 billion in structured finance, $2.2 billion in core fixed-rate investments, $525 million in low-leverage bank debt and $230 million in mezzanine investments. 

As the choppy year progressed, Hernandez’s team continued to shift its portfolio to higher risk-adjusted return and higher margin credit investments driven by $2.2 billion of structured finance (or debt fund) loan originations. A rapidly growing area for the firm, structured finance now accounts for 42 percent of Nuveen’s annual originations versus 6 percent in 2018. 

The firm wasn’t one of those shackled by the (largely absent) CLO market and was able to consistently execute deals as a result. Its investment in its originations and capital markets teams also paid off. With the help of the latter, Nuveen was able to continue to identify senior loan partners in the private market, and when that market hit pause was able to pivot and originate unlevered loans.

Approximately 92 percent of Nuveen’s core originations and 86 percent of its structured finance originations were in sectors the firm has strong conviction in — namely the multifamily, industrial and alternative spaces.

Notable transactions included a $160 million industrial acquisition financing for Brookfield and the Kuwait Investment Authority in New Jersey. The property was purchased vacant, and Nuveen’s loan served as a bridge to lease-up and, ultimately, a sale. Given the size of the loan and the lack of leasing at closing, Nuveen was able to drive strong terms, including lower leverage and attractive pricing — all of which led to strong relative value on a transaction it had conviction in,  “which would not have been possible if the capital markets were more liquid,” Hernandez said. 

As the market illiquidity continues, Nuveen is leaning in and preparing new initiatives and offerings for the second half of the year. The first is a high-yield debt strategy, and the second is a new impact credit strategy. The latter will take the form of a bridge lending strategy for emerging managers (or BIPOC and women majority-owned funds, developers and operators) to help diversify their financing options.  

“We’re really excited about impact credit, and as a firm we’ve always been really big on responsible investing,” Hernandez said. “We have a very big affordable housing platform on the equity side, and there’s no reason why we shouldn’t take that same ethos of responsible investing and impact, and apply that lens to our credit business.” 

Today, half of Nuveen’s U.S. debt business is BIPOC or female, and the firm continues to add diverse top talent across all levels of the organization. —C.C.