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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
Navigating Our World

NOW 2018 | China and the Race for Artificial Intelligence

Elise Liberto, CAIA
May 31, 2018

SPEAKERS: Elsa Kania, Adjunct Fellow, Center for a New American Security; Nick Zhang, CEO, Wuzhen Institute

MODERATOR: Porter Schutt, Portfolio Manager and Head of Delaware Office

 

The advent of artificial intelligence (AI) is one of the top technology stories in recent years. Not surprisingly, AI has also permeated public policy discussions, especially with the U.S. and China each putting forth plans to address the future of this technological revolution. The race is on to lead the world in AI innovation, and a panel of experts at NOW 2018 offered insight on the competitive dynamics between the two global superpowers driving progress in AI.

The U.S. has led AI research out of the gate, with its national focus on entrepreneurship and the startup infrastructure afforded by Silicon Valley and other innovation hubs. Nick Zhang, founder and CEO of the Wuzhen Institute, a China-based think tank, shared insights on the geographic dispersion of AI development thus far. Zhang presented data on three key indicators—AI company headquarters, AI patent filings and AI venture capital (VC) investment—to show that the U.S. has commanded the majority of AI activity over the past two decades. Notably, between 2000 and 2016, U.S.-based companies received more than 70 percent of total worldwide venture funding in the AI sector. But the activity gap has narrowed over the past five years, and a growing number of startups, patent filings and VC dollars are now driven by Chinese innovation.

Although the first stages of AI’s evolution have emanated from the West, China’s state-sponsored goal to lead the AI market by 2030 has accelerated research initiatives throughout Asia. Elsa Kania of the Center for New American Security specializes in Chinese defense innovation and emerging technologies. She highlighted the Chinese government’s role in the country’s pursuit of AI advancement; the government already has taken steps in terms of implementation, allocating data resources to startup companies with test-phase algorithms and establishing fully funded AI research laboratories. China’s proactive steps are particularly notable at a time when U.S. STEM (science, technology, engineering and math) funding is steadily declining—a dynamic that potentially opens the door for China to gain ground on the AI innovation front.

Keys to advancement in AI include the development of new algorithms, affordability of computational power and access to actionable data. Both countries have unique resources that offer competitive advantages. Today, the U.S. university system leads the field in algorithm research and, according to Zhang, is on the verge of computational processing innovations that will become the global gold standard. However, the U.S. faces a potentially insurmountable challenge in the form of China’s structural advantage relating to data collection. With a population of mobile and internet users more than triple the size of that of the U.S., China is fundamentally better positioned to collect actionable data for new AI applications.”

While a competition pitting two world superpowers against each other makes for good headlines, neither country is likely to dominate all AI disciplines. Investors may benefit from the research race we see today, which is likely to boost research funding on both sides and potentially accelerate breakthroughs in the field. As long-term investors with exposure to innovation centers in the private markets, Brown Advisory seeks investments that can benefit from the disruption potential of AI advancement. Almost all of the VC firms in our portfolio have invested in AI-driven companies, and we expect that trend to continue as AI grows more ubiquitous on a global scale. Sharpened by both the U.S. entrepreneurial ecosystem and China’s robust state-sponsored asset dedication, we expect AI innovation will occur at an increasingly rapid pace, yielding new technologies, social implications and investment opportunities in the years to come. 

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.

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