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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
Sustainable Investing The Financial Cost of Food Waste
Katherine Kroll
July 27, 2018

We all remember being told to clean our plates when we were kids. Unfortunately, that advice hasn’t stopped food waste from becoming a massive problem in the U.S. At Brown Advisory’s recent “Boston Innovates” event on sustainable food systems, we convened a panel of experts and leaders who are working towards food waste solutions. (The event was held in connection with our sponsorship of the U.S. Food Waste Summit, held June 26–27 at Harvard University.) 

Food waste—defined simply as food produced but not eaten—has more than tripled in the U.S. since 1960 and grown by 50 percent since 1990, and as much as 40% of all food in the U.S. goes to waste at some point in the supply chain, according to a 2017 report from the Natural Resources Defense Council (NRDC). This represents a massive setback in terms of hunger; reducing food waste by just one-third would be enough to feed all of the 42 million Americans who face food insecurity. It’s also a problem for climate change—almost all uneaten food in the U.S. ends up rotting in landfills, where organic matter accounts for 16 percent of U.S. methane emissions, according to the Environmental Protection Agency. Finally, food waste is responsible for massive financial losses—the value of food wasted in the U.S. currently comes in at approximately $218 billion per year, according to ReFED, a nonprofit focused on reducing food waste, 

While cleaning our plates might help, it wouldn’t come close to solving the problem entirely. ReFED's analysis shows that about 43% of food waste in 2015 was generated by households, but the majority occurred elsewhere—farms, manufacturers, grocery stores, shipping losses and restaurants.

As sustainable investors, one of the things we look for are challenges that create financial costs and thus opportunities to reduce those costs. Food waste is certainly one of those challenges, as shown in the chart below. The cost for end consumers that pay retail prices for food is highest, but there are meaningful costs across the food supply chain.

The Financial Cost of Food Waste

Source: ReFED (annualized estimates updated as of Mar. 31, 2016).

These costs create opportunities for a variety of businesses. In some cases, companies are able to reduce their own costs (and by definition improve their profit margins); for example, Marriott International is focusing meaningfully on food waste, and recently set a waste reduction goal of 50% percent by 2025. It participated in a pilot project of the American Hotel & Lodging Association that lowered overall food costs by more than 3 percent—a meaningful figure for a business that operates on relatively thin margins.

In other cases, firms can turn these costs into revenue opportunities, by creating new products and services that help their customers reduce food waste. Ecolab is a good example; it works with many grocery stores and other distributors of food that end up wasting food due to poor labeling (unclear labeling on products and shelves can often lead to premature disposal of food fit to be eaten). Ecolab’s Prep-N-Print program, according to the company, assists in waste reduction through automating the labeling process and capturing accurate product shelf life.

Food waste touches multiple issues that present material risks and opportunities to investors, from the immediate cost of discarded products to the longer-term implications of climate change. We believe that corporations will need to play a big role in a comprehensive long-term food waste solution, and the companies who proactively address this challenge may find ample opportunity to drive revenue and profit along the way. 

The views expressed are those of 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 and you may not get back the amount invested.

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 or asset classes mentioned. It should not be assumed that investments in such securities or asset classes 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.