Equities Fixed Income Hedge Funds Private Equity and Real Estate Sustainable Investing

Equities

We follow a philosophy that low-turnover, concentrated portfolios derived from sound bottom-up fundamental research provide an opportunity for attractive performance results over time. We have a culture and firm equity ownership structure that help us attract and retain professionals who share those beliefs, and we follow a repeatable investment process that helps us stay true to our philosophy.

We construct balanced portfolios for private clients, nonprofits and institutions depending on the needs of the client. We can be 100% open architecture, using third-party managers only, or we can put together a mix of internal and external strategies, whatever is in the client's best interest.

Fixed Income

We follow a philosophy that fixed income strategies built from a foundation of stability coupled with fundamental credit research can seek to generate alpha and control risk. We have a culture and firm equity ownership structure that attract and retain professionals who share those beliefs, and we follow a repeatable investment process that helps us stay true to our philosophy.

We construct balanced portfolios for private clients, nonprofits and institutions depending on the needs of the client. We can be 100% open architecture, using third-party managers only, or we can put together a mix of internal and external strategies, whatever is in the client's best interest. Meet the Investment Solutions Group.

Hedge Funds

Hedge Funds

The Investment Solutions Group is an investment-management team within Brown Advisory that specializes in asset allocation, manager selection, hedge funds and other alternative investment strategies. Dedicated to open-architecture solutions, our team has established a strong track record of identifying high-quality, third-party investment managers across the hedge fund, long-only and private equity universes. We leverage this expertise to help clients assemble portfolios that we believe best fit their needs and goals, offering clients a range of solutions from complete portfolio management to fulfillment of specific hedge-fund and alternative-asset mandates.

Founded in June 2002, the Investment Solutions Group now manages in excess of $3.4 billion for clients (data as of January 31, 2017) in a combination of managed accounts, advisory relationships and fund-of-fund offerings.

Private Equity and Real Estate

Private Equity and Real Estate

Brown Advisory has incorporated private equity and real estate investments in client portfolios since our founding. Today, we can provide that exposure in three distinct ways.

Feeder Funds and Multimanager Funds
We introduce clients to investment opportunities in early- and late-stage venture capital and buyout funds, as well as select real estate funds. We also construct these feeder funds into multimanager funds through our Private Equity Partners (PEP) and Real Estate Partners (REP) vehicles to make private equity investing as easy as possible for our clients.

Customized Private Equity Portfolios
For most clients, private equity is one component of a balanced portfolio that we manage. Other clients, however, come to us specifically for custom-built private equity and real estate portfolios.

For more information on private equity please click here or contact Jacob Hodes at 410-537-5315 or [email protected].

Sustainable Investing

Sustainable Investing Strategies

  • Multi-Manager Strategies
  • For clients seeking an open-architecture solution, we have access to several of the premier sustainable managers in the industry - all vetted by internal research.
  • Private Equity
  • Our private equity team is focused on evaluating the growing universe of private impact investments to identify standout opportunities that target various issues of particular concern to our clients. To date, we have placed assets in investments targeting a variety of impact themes such as community impact, microfinance, education technology, sustainable real estate, water initiatives and others.*
  • *Many alternative investments by regulation may only be sold to Accredited Investors (institutions with at least $5 million in assets) or Qualified Purchasers (institutions with at least $25 million in investments).

Customized Portfolios

This diverse assortment of solutions will meet many clients’ sustainability objectives; however, we understand the continued evolution of this space and seek to be able to react quickly to client needs.

For clients with unique missions, value-aligned investing programs, or who simply wish to ensure that they do not own certain controversial companies or have access to certain industries, we offer the following customized options:

Additional Screening: To the extent we have reliable data and can build rules into our compliance systems, we can add specific screens to a separate account to restrict companies (e.g. oil and gas providers) or industries (e.g. tobacco or weaponry).

Customized and Thematic Portfolios: Within a separate account, we can work together to solve for a sustainability need. From a universe of securities researched from both the bottom-up and for their ESG profile, we can assemble a custom portfolio of securities designed to meet many specific sustainable goals or outcomes.

ENERGY, MONEY AND THE NEW WORLD ECONOMY

The benefits to the U.S. from its “revolution” in shale oil production have been far-reaching. The industry generated millions of jobs in the aftermath of the Great Recession. Indeed, former Federal Reserve Chairman Ben Bernanke called the shale boom one of the biggest boosts to the U.S. economy since 2008.

Brown Advisory's NOW 2016 | Navigating Our World
Daniel Yergin at NOW 2016
Photo from the NOW 2016 session titled, Energy, Money and the New World Economy. No video is available for this session.

Moreover, U.S. oil output nearly doubled from 2008 until 2015, and production now exceeds that of every member of OPEC except Saudi Arabia. Drastically less dependent on oil imports, the U.S. has gained diplomatic leverage in the Middle East and elsewhere. Indeed, without the surge in domestic production, the U.S. would have likely been unable to secure a deal to curb Iran’s nuclear capabilities because oil sanctions would have failed, according to Daniel Yergin, vice chairman of IHS, a global research and information company with 9,000 employees in 33 countries.

Thanks to shale, the U.S. is now a “short-cycle producer,” and many production companies in the U.S. can ramp up or wind down output quicker than most competing sources of oil. Over time, such flexibility will help keep prices relatively low or moderate, though with a potential for volatility, Yergin predicted at the NOW 2016 conference. Major disruptions in supply could change that outlook.

Although other countries are stepping up efforts to tap energy from shale, they are unlikely in the foreseeable future to challenge the pre-eminence of North American producers, Yergin said. The U.S. holds advantages that are difficult to duplicate, including its approach to regulation and its laws that give landowners mineral rights, he said.

At the same time, Yergin said, producers need to pay close attention to the public’s environmental concerns, while noting that shale production is a highly regulated activity. Yergin cited a report by the Obama administration’s committee on the environmental aspects of shale—on which Yergin served—which found that the environmental aspects are generally appropriately managed.

The price of oil hovered at around $100 per barrel for several years before plunging in November 2014. In May, the price ranged from about $45 to $50 per barrel.

Yergin is one of the most soughtafter thought leaders on the interplay of energy, international politics and the global economy. His book—The Prize: The Epic Quest for Oil, Money and Power—won the Pulitzer Prize. His most recent book, The Quest: Energy, Security and the Remaking of the Modern World, describes the new geopolitics of energy, the emergence of new sources of energy and competition among nations to achieve energy security.

Even Yergin is reluctant to forecast the price of oil. Anyone tracking the oil industry needs to be prepared for “the inevitability of surprise” from forces including geopolitics, major economic shifts and technological change, he said. Still, he said, he expects to see a better balance in 2017 between oil supply and demand. Oil would need to rise to about $60 per barrel to induce an increase in production, he said, predicting that $100-per-barrel oil is unlikely to be the norm. The wild card would be a major disruption of supply from exporting countries.

Brown Advisory's NOW 2016 | ENERGY, MONEY AND THE NEW WORLD ECONOMY
Daniel Yergin has earned his reputation as America’s, and perhaps the world’s, leading expert on the energy industry. His book The Prize: The Epic Quest for Oil, Money, and Power won a Pulitzer Prize and is still required reading for anyone interested in the history of oil. His follow-up in 2011, The Quest: Energy, Security and the Remaking of the Modern World, was equally prescient in its thesis that the future energy economy would not be characterized by a simplistic replacement of oil by some new technology, but rather a more nuanced combination of traditional and alternative energy sources, all competing with each other. Dr. Yergin will share his views on current events and his assessment of the world’s energy future.Oil prices peaked at $147 per barrel in the summer of 2008. For several years, prices hovered around $100 a barrel until the OPEC meeting in November 2014. Since then, the price of oil has fallen, hitting a low of $26 in February 2016 before recovering in May 2016 to a range of $45 to $50. Lower prices have compelled U.S. producers to improve efficiency and accelerate innovation. Yergin estimated that a dollar invested in oil production today has twice the impact of just two years ago.

While gas-powered cars are unlikely to disappear anytime soon, Yergin said he expects that public attitudes and regulation will lead to greater use of hybrid and electricpowered vehicles. Tesla has changed public perceptions of the electric car, he said, from the “egg on wheels” of the 1990s to an attractive, stylish and high-tech vehicle. With its Model 3, Tesla aims for volume, supported by the construction of its Gigafactory battery facility. Yergin noted the irony that the first lithium ion battery was developed by Exxon in 1975, when it was thought that the world was soon going to run out of oil.

At Brown Advisory, we seek to partner with innovators in the energy industry and companies that show promise of long-term success. Yergin said that pioneers behind the shale revolution showed what Walter Issacson’s biography of Steve Jobs calls a “reality distortion effect’’—a combination of focus and willpower that broke through established wisdom, skepticism and institutional obstacles. Their boldness vaulted the U.S. among the world’s top three oil producers, reducing its imports from 60% of total supply to 25%— an achievement that, a decade ago, seemed definitely out of reach.

 

The views expressed are those of the author and Brown Advisory as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be and should not be relied upon as investment advice and are not intended to be a forecast of future events or a guarantee of future results. Past performance is not a guarantee of future performance. The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the author on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is intended solely for our clients and prospective clients, is for informational purposes only, and is not individually tailored for or directed to any particular client or prospective client.

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