US Bancorp has acquired a 9.5 per cent stake in US investment firm Nuveen Investments in exchange for its FAF Advisors asset business.

FAF, which manages $25 billion worth of long-term assets, is the advisor of First American Funds. Under the agreement, FAF will combine with Nuveen Asset Management, which by itself already holds $75 billion in municipal fixed income assets. The resulting entity will have a total of $175 billion in institutional and retail assets upon completion of the deal.

"Together, the acquired FAF business and Nuveen Asset Management, which will operate under the name of Nuveen Asset Management with operations in Chicago and Minneapolis, will create a substantial affiliate within Nuveen Investments' multi-boutique business model," said Tom Schreier, the chief executive officer of FAF.

Schreier has been named the vice chairman for wealth management of Nuveen Investments, with responsibility over wealth management platforms and related service functions. Bill Huffman, presently the co-head and chief operating officer of Nuveen, has been appointed president of the combined Nuveen Asset Management business.

Nuveen Investments provides investment services to institutions and high net worth investors, as well as the consultants and financial advisors who serve them.