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Equities Fixed Income External Managers 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.

Brown Advisory Equity Strategies

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.

Brown Advisory Fixed Income Strategies

External Managers

Investment Solutions Group

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.

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.

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.

Investment Insights and Thoughts from Brown Advisory
Asset Allocation, Fixed Income Investment Perspectives | Seeking Yield
Bill Paternotte, CFA
October 18, 2016

Late September announcements by the Federal Reserve and the Bank of Japan (BOJ) underscore that today’s extraordinarily low interest rates are likely to persist for some time to come. The Fed’s decision to leave rates unchanged means that its quarter-point hike in December 2015 stands as the only increase in more than 10 years despite significant economic progress over the period. The BOJ indicated that it will continue its aggressive program of buying bonds and keep the yield on its sovereign 10-year bond at approximately zero.

When market pundits invoke the term “uncharted territory” to describe why the outlook may be clouded, they often exaggerate for effect. In the case of interest rates, however, the word uncharted can be taken literally. According to a 2015 study by Bank of America Merrill Lynch, interest rates today are lower than they’ve been at any time since the First Dynasty of Egypt—virtually the dawn of civilization. And we doubt that rates were “charted” in 3100 BC.

Central bank policies that push the world’s largest economies into unexplored terrain prompt some fundamental questions. What are the goals of extreme monetary easing? What are the limitations and risks of the policies? Also, during an extended period of record low interest rates, what opportunities are available to investors who depend on a steady cash flow from their portfolios?

Negative Rates

Currently, interest rates in many parts of the world are negative, meaning that a person or entity with excess cash must pay an institution to hold it. In Denmark, for example, the rate on certificates of deposit is minus 0.65%, and in Switzerland, the rate on deposits is minus 0.75%. Meanwhile, the European Central Bank has set a base interest rate of zero. In the capital markets, two European companies, Sanofi and Henkel, have issued euro-denominated bonds with negative yields.

In the U.S., rates remain positive but at historically low levels, as Fed policymakers voted in late September to maintain the target for federal funds at 0.25% to 0.50%. Despite continued improvements in the economy and the labor markets, rates are only a quarter of a point above where they were in the depths of the financial crisis of 2008-09, when banks and various other companies had to be bailed out by the government. The 10-year Treasury bond currently yields about 1.7% (seemingly a bargain among developed markets). This too is about a quarter point above its low point.

Viewed in inflation-adjusted terms, it’s not unusual for interest rates to be negative. Real interest rates turn negative whenever inflation exceeds the rate of interest—an occurrence from time to time in emerging and developed markets alike. It usually doesn’t last long because central banks typically try to reduce inflation by tightening (raising) interest rates aggressively. What’s unusual about today’s interest rate environment is that nominal rates are negative in much of Europe and Japan, and they have been so for several years in some cases. This is truly uncharted territory.

WORLDWIDE “REAL” INTEREST RATES* DECLINED FR0M 03/31/1985 UNTIL 3/31/2013.

Aggressive Easing

Whether in nominal or