Thoughtful and Innovative Strategies for Institutional Investors
NISA manages portfolios for some of the largest institutional asset owners in the world. Client portfolios include investment-grade fixed income, derivative overlay and index-like equity investments. Our median client relationship is over $380 million.
NISA is 100% employee-owned and based in St. Louis, Missouri. Members of our experienced senior leadership team provide guidance for the firm through the Management and Investment Committees. We employ over 275 people, approximately one quarter of whom have a participation interest in the firm.
As of September 30, 2019, NISA manages $221 billion in physical assets, of which 95% are fixed income portfolios comprised mostly of U.S. Treasury and investment grade credit securities.
In addition to physical assets, NISA manages $141 billion in derivative notional value in separate account overlay portfolios.
Long Duration Bonds
NISA specializes in long duration bond portfolio management. Our portfolios are often part of liability-driven investment strategies that emphasize a high degree of interest rate exposure and tight tracking error targets. Benchmark customization is common and frequently incorporates characteristics of the liability being hedged.
Short and Core Duration Bonds
NISA manages fixed income portfolios against both broad market (e.g., aggregate and TIPS) and highly customized benchmarks. Our risk-controlled approach to active management focuses on risk-adjusted alpha. Our style is often viewed as a complement to more aggressive strategies employed by other managers.
NISA is a leader in derivative overlay strategies, which deliver highly customized exposures and demand great attention to detail. Our size and experience give us deep product and operational knowledge, and we have invested in the infrastructure needed to manage such portfolios.
NISA manages index-like equity portfolios primarily for taxable clients who are seeking tax efficiency, but also for investors seeking custom factor tilts or environmental, social, and governance (ESG) objectives. Many of the assets in these strategies are managed for Nuclear Decommissioning Trusts (NDTs).
Strategies and Solutions
Risk-Controlled Fixed Income
NISA believes that fixed income markets offer opportunities to capitalize on moderate inefficiencies for predictable gains. Nonetheless, we believe there are limits to the amount of excess returns that can be generated absent tracking error that compromises the strategic rationale for fixed income. NISA manages portfolio risks with low tracking error and high information ratio targets relative to client benchmarks.
Pension Risk Management
NISA is a leader in liability-driven investing and de-risking strategies for pension plans. We believe our risk-controlled style, our ability to customize, our market presence in long duration fixed income and derivatives, and our extensive experience working with pension plans and their advisors differentiate us in this space.
NISA is one of the largest derivative overlay managers in the world. We manage customized strategies across the derivatives spectrum, including beta overlay, duration overlay, options strategies, portfolio rebalancing, and alternative risk premia, among others. These programs demand both operational expertise and highly engaged client servicing.
NISA has been managing assets for defined contribution plans since its inception. Assignments include short duration bonds, stable value portfolios, and structuring, negotiating and managing stable value wrap agreements. Over the last several years, we began consulting with clients and providing research to help DC plan sponsors think about building better retirement outcomes for participants. NISA believes it can tailor a plan’s default option to address the key retirement risks that participants face (i.e., under saving, market risk, inflation risk, and longevity risk, etc.), in addition to working with sponsors to create customized fixed income portfolios designed to stabilize retirement income and help plan sponsors engage participants so they can plan and retire with greater confidence.
Tax-Sensitive Portfolio Management1
For taxable investors, NISA believes the after-tax return, rather than the pre-tax return, is the appropriate measure of performance. Knowing and addressing the effects of client-specific tax circumstances are fundamental to NISA’s tax-sensitive mandates. Strategies may include loss harvesting, turnover management, dividend/interest management, and considerations of state and local tax regimes.
Background and Founding
NISA’s founders, Jess Yawitz and Bill Marshall, began their careers as professors at Washington University in St. Louis, where they were early pioneers in research on fixed income investing and the concepts of interest rate risk management and immunization. After leaving academia to work on Wall Street, Jess and Bill returned to St. Louis, founding NISA Investment Advisors, LLC in 1994 as a firm focused on fixed income investing for large institutional investors.
Growth in Clients and Assets
Since its inception, NISA has maintained discipline regarding both clients and assets. Large, risk-controlled and liability-aware portfolios have been a mainstay since the company’s founding. Product expansion has generally been a direct result of client input. We manage growth carefully, typically adding a limited number of new relationships each year. Fundamental to this discipline has been a continuous expansion of staff in advance of workload demands.
We anticipate a continuation of our measured growth, in terms of assets, clients, and employees. From time to time we have discussions with clients regarding extending our investment style and approach to new products and markets, which will likely lead to a gradual expansion of investment products.
We believe our independence is a key strength, and we have no current plans to affiliate with any other entity or change our ownership structure, other than continuing to expand ownership among employees.
2019 Assets Under Management is as of 09/30/2019. $7.8 billion in Repurchase Agreement notional and underlying assets are reported in both physical assets and derivatives notional value under management.
The data supplied by NISA are based on trade date and calculated according to NISA’s pricing policies. NISA maintains the data only for its portfolio management, guideline verification and performance calculation purposes and the data may differ from the recordkeeper. NISA does not provide pricing, recordkeeping, brokerage or any related services. You should compare and verify the information on this report with the information on the statement from the recordkeeper. A summary of NISA’s Pricing and Valuation policy is available upon request.
1NISA Investment Advisors, LLC does not purport to and does not, in any fashion, provide tax, accounting, actuarial, recordkeeping, legal, broker/dealer or any related services. You should consult your advisors with respect to these areas and the material presented herein.