**Updated April 30**
In the face of the rapidly evolving COVID-19 outbreak and its impact on financial markets, Brown Advisory’s top priorities are the well-being of our clients, colleagues and communities, and the uninterrupted delivery of performance, advice and service to our clients.
As a result of many years of rigorous business continuity planning and testing, and the diligent work of the COVID-19 task force we established several weeks ago, we believe we are well prepared to meet these priorities through changes we have implemented and summarize below.
- On April 29, Mike and Dave sent a ninth weekly letter to clients.
- We launched our podcast, Navigating Our World, to explore the pressing issues that are shaping our investment thinking and our society.
We will keep this space updated with new information as it becomes available.
- INSTITUTIONAL STRATEGY COMMENTARY: Our portfolio managers and research teams are providing audio commentary regularly during this period, to ensure that clients and other parties can stay up to date on our perspectives regarding current market volatility and how we are positioning portfolios. Most of these webcasts are 5-10 minute updates from the portfolio managers, designed to provide essential information to clients in an effective manner.
Please click here to access our institutional strategy webcast center; if you have not previously registered you will need to complete a simple registration process to access the content. Below is a list of webcasts posted during this period:
- April 9 Q1 2020 Equity Strategy Webcasts: Large-Cap Sustainable Growth, Large-Cap Growth, Global Leaders, Flexible Equity, Small-Cap Fundamental Value, Mid-Cap Growth, Small-Cap Growth, Equity Income
- April 9 Q1 2020 Fixed Income Strategy Webcasts: Sustainable Core Fixed Income, Tax-Exempt Sustainable Fixed Income
- April 6 ESG Research Update: Our Sustainable Investing team posted a new article, "COVID-19 Through An ESG Investing Lens," in which equity research analyst Emily Dwyer and fixed income research analyst Lisa Abraham discussed how companies in our portfolios are rising to the challenges presented by the coronavirus outbreak, and the work we are doing to monitor their progress.
- April 3 Technology Sector Webcast: John Canning, CFA, and Emmy Wachtmeister, CFA, Equity Research Analysts specializing in the Information Technology sector, discussed their views on how the sector is being impacted by the COVID-19 outbreak. Access the webcast here.
- March 27 Health Care Sector Webcast: Eric Gordon, CFA, Head of Equity Research and Mark Kelly, Equity Research Analyst specializing in the health care sector, discussed perspectives on how the sector is responding to, and being impacted by, the COVID-19 outbreak. Access the webcast here.
- March 20 Equity Strategy Webcasts: Large-Cap Growth, Large-Cap Sustainable Growth, Latin American, Global Leaders, Mid-Cap Growth, Small-Cap Growth, Small-Cap Fundamental Value.
- March 20 Fixed Income Webcasts: (Note: Fixed income strategies are only available to U.S. investors) National Municipal Bond, Strategic Bond, Sustainable Core Fixed Income, Tax-Exempt Sustainable Fixed Income.
- March 13: Equity and Fixed Income Strategies Update—commentary from Eric Gordon (Head of Equity Research), Tom Graff (Head of Fixed Income) and Keryn Brock (Head of International Institutional Business).
- PRIVATE CLIENT/ENDOWMENT & FOUNDATION COMMENTARY:
- April 14: Our Sustainable Investing team posted a new webinar, "Analysis, Outlook and Opportunities," in which research analysts Elise Liberto and Elizabeth Hiss join CIO of Sustainable Investing Erika Pagel to cover the performance of our sustainable investments across various asset classes during the COVID outbreak, and discuss some of the opportunities they are seeing in the current market.
- April 8: Our Strategic Advisory Team published a helpful guide titled "Small Business Loans Under the CARES Act," to help clients better understand the newly enacted programs for tax relief and loan eligibility for small businesses.
- April 3: Our Endowments and Foundations team posted a new article, "The CARES Act: Impacts on Endowments and Foundations." The article discusses key provisions in the Act that may affect fundraising, loan availability and a variety of other aspects of nonprofit operations.
- April 1: Our Strategic Advisory team posted a new article, "Strategic Planning in Volatile Markets," that covers a wide range of tax, gifting and other planning steps that clients may want to consider as they review their goals and long-term plans in this market environment.
- March 30: Our Investment Solutions Group posted a new article, "Managing Liquidity in the Coronavirus Market," which discusses how lower levels of liquidity in equity and fixed income markets today, vs. 10 years ago, can exacerbate volatility during periods of stress. The article also covers how we manage this new liquidity reality in client portfolios.
- March 27: Our Strategic Advisory team posted an article, "The CARES Act: A First Look," in which they summarize the key provisions of the massive federal stimulus package that is poised to inject more than $2 trillion into the U.S. economy. The article will be updated in the coming days as new information becomes available regarding implementation of the Act's various programs.
- March 26: Our Strategic Advisory team posted an article, "Tax Loss Harvesting: Upside To a Down Market," in which they offer an introduction to the practice of realizing losses strategically for the purpose of mitigating taxes. This topic is especially timely given the market's recent downturn and one which we are discussing with many clients.
- March 25: (Via our NextGen Venture Partners team) In an investor webinar, Dan Mindus, Brett Gibson and Jon Basset, all NGVP Managing Partners, discussed how NextGen's portfolio companies were adapting and responding to COVID-19. Access the webinar here.
- March 23: Charlie Constable sent a follow up note to clients regarding tax-related changes implemented by the IRS in response to COVID-19
- Key message: 2019 federal tax return filing due date postponed to July 15
- Official IRS Notice: 2020-18 [This supersedes notice 2020-17]
- March 20: Charlie Constable, Head of Private Client, sent this note to clients regarding tax-related changes implemented by the IRS in response to COVID-19
- Key message: 2019 and Q1 estimated tax payments deferred to July 15
- Official IRS Notice: 2020-17
- March 19: Paul Chew, CFA, Chief Investment Officer; Christopher Hancock, CFA, Head of International Investment Solutions Group; and Erika Pagel, Chief Investment Officer of Sustainable Investing (with Jacob Hodes, Head of Private Equity, moderating) discussed the evolving conditions in global capital markets and how these conditions are impacting our clients' portfolios and driving client-specific decisions. Access the webinar here.
- March 19: (Via our NextGen Venture Partners team) Ed Mathias, Senior Advisor at The Carlyle Group, and Paul Chew, CFA, Chief Investment Officer, discuss how macroeconomic changes are impacting decisions in both public and private markets. Podcast can be found here.
- March 17: (Via our NextGen Venture Partners team) Dan Mindus, NGVP Managing Partner, and Taylor Graff, CFA, Head of Asset Allocation Research, discuss the impact of the novel coronavirus on economic trends and financial markets. Podcast can be found here.
- GENERAL NOTES ON OUR CURRENT EFFORTS AND MINDSET:
- Our research and portfolio management teams are working diligently to take in market data and other information as it evolves, and interpret that information as best we can to make decisions for clients. On a daily basis, our equity, fixed income, private equity, asset allocation and manager research groups are meeting to update each other about relevant developments in their respective areas. We are compiling and sharing a daily summary of these investment discussions firmwide.
- Market conditions are changing rapidly, and during periods of volatility, we generally focus on the principles that have enabled us to serve clients well for many years—patience and discipline; ensuring ample liquidity; sticking to long-term plans and avoiding major deviations from those plans; capitalizing when a materially undervalued investment opportunity presents itself. Although each client’s situation is different, those principles are still broadly valid during this period.
- We are benefiting greatly from our daily morning research meeting. For many years, our entire firm has gathered at 8:30 a.m. each Monday, Tuesday, Thursday and Friday to discuss timely investment topics. Despite the fact that we are now all working remotely, our morning meeting sessions continue to help us share ideas and perspectives with each other.
- Management & Operations:
- The following communications have been sent to all clients from Mike Hankin (President and CEO) and Dave Churchill (CFO and COO):
- April 29 (Key messages: We are putting plans in place to support an eventual return to our offices)
- April 22 (Key messages: NOW podcast launch and continue remote operations)
- April 15 (Key messages: optimism tempered with caution regarding pandemic's trajectory)
- April 8 (Key messages: fourth week of remote operations and organizing a "back to office" plan)
- April 1 (Key messages: we are embracing our "new normal" and investing for the future)
- March 25 (Key messages: we are thinking about the future and feeling opportunistic)
- March 18 (Key messages: update on operations and upcoming webinars, launch of CV Information Center on website)
- March 11 (Key message: decision to shift to a remote working environment)
- March 5 (Key messages: coronavirus task force established, NOW “cancellation”)
- The following communications have been sent to all clients from Mike Hankin (President and CEO) and Dave Churchill (CFO and COO):
- Performance, Advice and Service:
- Our focus is having targeted conversations with each of our clients. Our goal is to reach all of our clients personally as much as possible during this period. It is critical to understand how the outbreak is affecting their individual situations in order to determine whether any adjustments to their portfolios or other planning structures are warranted.
- Brown Advisory is fully operational with nearly all colleagues working from home. Starting in late February, we began enhanced testing of our business continuity plans in anticipation of the social-distancing scenario we now face. On March 11, we made the decision to have all colleagues begin working from home for at least two weeks. We are fully prepared to work remotely as a firm for an extended period if needed. Offices are being staffed for essential functions only. We will continually monitor conditions to determine an appropriate time to reopen our physical offices.
- Management of client assets has not been impacted by this change. Our teams have all been able to efficiently implement portfolio decisions and trades from their remote locations, during a period of extraordinary market volatility and incredibly high volumes.
- Domestic and international work travel has been suspended; all meetings with clients and external parties are being conducted via phone or video conference unless extenuating client circumstances require an in-person meeting. These changes are based on our desire to protect the health of our clients and colleagues, and to avoid any scenario where our business operations may inadvertently contribute to the spread of the coronavirus. As noted below, our client teams are working hard to connect with clients directly during this period, and are well equipped to set up remote meetings that can include clients’ outside advisors and fully accommodate shared viewing of presentations and documents.
- On April 21, we launched our podcast, Navigating Our World. In the wake of cancelling our 2020 NOW conference due to the COVID-19 outbreak, we assembled this podcast series with the goal of sharing conversations with innovators and thought leaders about the pressing issues that are shaping our investment thinking and our society. Our first episode features a conversation between noted historian Jon Meacham and our CEO, Mike Hankin, about what we can learn from past leaders to guide us during the current crisis that we all face together. You can access the podcast at our NOW website, and through your favorite podcast platform.
- As noted in our March 5 letter to clients, we regretfully cancelled our in-person NOW 2020 conference. We have hosted this major client gathering biennially for more than a decade; it is an opportunity for shared learning alongside our clients about the major forces shaping society and capital markets. In its place, we are pushing forward with plans to bring our speakers and sessions to you digitally. We are developing a podcast series and several video sessions as a platform for the exceptional group of speakers and experts that were a part of the originally planned conference agenda; we will provide updates on those plans soon.
- All other Brown Advisory events scheduled through May 15 have been cancelled. These steps, and any further decisions regarding future events, are guided by ongoing guidance from the Centers for Disease Control and Prevention (CDC) and our own caution regarding potential health risks to attendees. During this period of prolonged social distances, we will continue to think about ways to use technology and other means to create interactive experiences for clients.
If you have any questions about Brown Advisory’s plans during this period, please do not hesitate to reach out to your client team. We are grateful to our dedicated and resourceful colleagues for their work in ensuring a seamless adjustment to a rapidly evolving environment. We are confident in our ability to maintain a high level of performance, advice and service to our clients fully in the days and weeks ahead.