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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
Equities Beyond Bottom-Up
Timothy Hathaway, CFA
December 18, 2017

Fundamental investing is a contest of advantage: informational, analytical and behavioral. If investors can gather information and develop insights about companies more effectively than others, they will have the advantage. If they can do it consistently, it may become a formula for long-term success.

Understandably, investment firms commit substantial resources to fundamental research. These efforts to achieve informational advantage are broadly referred to as “bottom-up investing” due to their focus on primary information gathering and ground-level analysis. Firms hire and develop talented analytical minds to pore over every quarterly earnings report, public SEC filings and comments from executives. These analysts crisscross the globe to meet with company management and visit factories and distribution centers. They survey customers to learn whether those customers are delighted, satisfied or ready to jump ship. They get up in the middle of the night for conference calls, just to hear from key suppliers of the companies in their cross hairs.

At Brown Advisory, we focus a great deal of energy and resources on fundamental research, with a singular goal of gaining an informational advantage about companies so we can make smart investment decisions and beat the market and our competitors.

Good investment firms learn quickly from each other and, over time, it becomes more difficult to squeeze informational advantage out of research techniques that are widely practiced by many firms. Therefore, we are constantly seeking to innovate and bring additional perspectives into our fundamental research—to go “beyond bottom-up” investing in our quest to generate outperformance for our clients.

The following are ways we seek to identify additional risks and opportunities outside traditional analysis:

  • Investigative research
  • ESG analysis
  • Quantitative risk analysis and reporting
  • Behavioral analytics

Investigative Research

In his book Snow Crash, Neal Stephenson wrote about the immense value of being able to “condense fact from the vapor of nuance.” We certainly find this to be true in our fundamental research efforts, and we often need to pull together qualitative information from secondary sources on highly specific topics—from field-level experts, customers and channel partners, and from our valued relationships with our board members, private equity and venture partners, external investors, and clients with knowledge in relevant fields. We need to synthesize all of this information into cohesive insights - to condense fact from the vapor of nuance.

To address this need, we created the role of investigative analyst on our research team to serve as both a conduit and lightning rod for the flow of potential qualitative information that can help us make better decisions about the companies we consider for our portfolios. An investment firm that we hold in high regard had shared with us the benefits of such a role on its own research team and, based on that firm’s experience, we gained confidence that the idea could be effective for us as well.

This role is not focused on a specific sector, but rather seeks to use broadly applicable investigative skills to answer complex questions about specific companies and relevant industries. The analyst needs to gather and synthesize data from secondary sources as well as primary interviews, so the role requires strong networking abilities, a personable and charismatic demeanor, the ability to understand and interpret data, identifying commonalities and connections between trends, and active listening in pursuit of knowledge. In our search to fill this role, we were pleased to find Doug Falk—an internal candidate who had previously served the firm in other roles—who had all of the characteristics that we believed would allow him, as well as the team, to succeed.

We find that a disciplined approa