TIAA-CREF, which has asset under management of $453bn, has made this investment as it seeks to gain a larger share of the outsourced investment management market, the Financial Times reported.
According to the report, Covariance will be headed by Scott Wise and run as an independent unit based in Houston, Texas.
The new venture will target almost $1.5 trillion of assets held by US endowments and non-profit foundations.
It will seek allocations from endowments with assets of more than $100m and intends to begin investing in July, the newspaper said.
