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.

INNOVATION PHYSICS

Investors worldwide are seeking to find the next Facebook and Google while venture capitalists are pouring capital into companies that they predict will disrupt industries and fundamentally alter the way we live. The ability to identify the next digital juggernaut is the most sought-after skill among firms focused on finding companies with the prospect for rapid growth. Retail investors searching for the next high flier, however, do not always possess a sophisticated analytical framework usually needed to support this ability.

Brown Advisory's NOW 2016 | Navigating Our World

Watch highlights from the NOW 2016 session titled, Innovation Physics.

Meet Harry Weller. A general partner of the venture capital firm NEA, Weller has created a blueprint for understanding the emerging forces driving disruptive technologies. Speaking at the NOW conference, he focused on how fundamental changes in computing during recent decades have led to the emergence of "Four Cs" driving innovation—computing, connectivity, componentization and consumption. Every year, advances in technology roughly cut in half the cost of the devices that feature the Four Cs, Weller said.

Computing power is so robust today that it is common for multiple applications to run on a single server. Also, in recent years, connectivity among computers leaped forward, with sophisticated networks of computers that are now ubiquitous, cheap and interwoven with daily life, Weller said.

Rapid progress in computing and connectivity has led to a boom in cloud computing, or the sale of computing power and data storage through the Internet. By using the cloud, companies can save money and boost efficiency by shutting down their own data centers and calibrating their use of computing power based on their immediate needs. The cloud has encompassed millions of applications, from massive data processing to sharing photos with friends and family. "I call it the server coming out of the closet," Weller said. "You're no longer running your own server—you're renting someone else's server."

Brown Advisory's NOW 2016 | INNOVATION PHYSICS
As a leading venture capitalist and head of NEA’s East Coast early-stage venture practice, Harry Weller is a devoted student of innovation—in particular the principles that drive it and how those principles are evolving over time. During this session he will discuss a number of perennial drivers of innovation such as connectivity, componentization and consumption, as well as emerging forces powering a new wave of innovation such as antifriction, virality and computing systems capable of judgement.Cloud Titans

Amazon.com, Microsoft and Google have emerged as the clear leaders in the business of renting out computing power via the Internet and will thrive from the migration to the cloud, Weller predicted. "In 2006, there were more virtual servers than there were physical servers, meaning this process has already occurred and it's violent, it's happening extraordinarily quickly," Weller said. (Please see the related story in the June edition of The Advisory.)

"Componentization"—the third C driving innovation—makes easier the scaling up of myriad component products and processes to millions of users in one application, Weller said. The simultaneous release of a new movie title worldwide by Netflix or HBO GO is one example of the profound impact from componentization.

This rising trend explains the disruption occurring in the software industry, which is automating front office systems, according to Weller. Companies such as banks, airlines and movie rental services that have relied on branches or storefronts are increasingly becoming automated through application software: one huge application running on many servers made up of multiple components. Complex examples of componentization, such as the automated driverless car, will become commonplace, Weller predicted.

Consumption is the final C driving innovation, according to Weller. Technology today is "injected" into everyday life through devices—Apple Watch, a digitally connected thermostat or a Tesla car. These systems advise us where to park or adjust the temperature of our homes without requiring us to log on to a computer. Consumers will also increasingly find "immersive" technology at hand, through the virtual reality of threedimensional games or augmented reality, which casts three-dimensional images on the world around us. Computer "screens will be gone," Weller said.

Customer First

Thanks to the Four Cs, all companies are becoming "customer-facing," Weller said. For example, Caterpillar no longer makes only tractors. To remain competitive, its software must be equipped to relay real-time performance data to customers, he said.

The restructuring of companies to be more customer-facing will drive trillions of dollars in market capitalization and value, according to Weller. The companies that reap the majority of these benefits, he predicted, will be those which harness three factors: anti-friction, or the seamless execution of processes from the conception of a business to the satisfaction of customer demand; virality, the ability to gain appeal among millions of customers within a short period at minimal cost; and judgment, the use of neural networks and quantum computing to mimic human decision-making.

The spread of innovation and the rise of unprecedented efficiency and superior business models bring tremendous opportunities for investors, according to Weller. For businesses today, "economies of scale are actually in the network; they’re in computing," he said. "Innovation can happen anywhere. You don’t have to be in Silicon Valley anymore. The components are in the cloud—anyone can innovate," he said.

At the same time, a disproportionate amount of wealth today is flowing to a company's founders and shareholders, not distributed along its supply chain, raising "implications for income inequality." A public policy challenge, Weller said, lies in the fact that the revenues generated by the Four Cs may not be widely shared.

The Four Cs

Four Forces Fueling the Boom in Digital Innovation

SOURCE: New Enterprise Associates

 

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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