Brown Advisory client teams are making personal contact with clients to offer specific guidance regarding portfolios and planning steps in the midst of the COVID-19-driven market volatility.

Additionally, Mike Hankin (President & CEO) and Dave Churchill (CFO & COO) are writing regularly to our entire client base to provide context and updates on the firm's evolving operations and our responsibilities to clients during this period.

Below you will find a running record of these communications.

 

May 13, 2020

Dear Clients,
 

We hope that you have found these weekly updates helpful. We appreciate the opportunity to communicate with you and, frankly, have learned a great deal from taking time each week to reflect on what has happened and how our views on the future may have changed. While we were not expecting many of you to write back, we appreciate those who have shared their thoughts and questions with us. Your engagement has been helpful to our thinking about ways we might be able to serve you better. As many of you know, this has always been part of our DNA—we strive to make changes, decisions and investments today so that five and ten years from now, or more, our clients will be able to say with confidence that we were always focused on the future as well as the present.

We look back on two months of remote operations knowing that we have a much better understanding of the environment in which we are all living. It has been an educational process that none of us can say we anticipated. One of our colleagues reflected this week on how much we have learned about our ability to adapt as individuals and as a firm to a remote work environment. The preparation and testing carried out each year by our technology and operations teams have served us well. It is our shared purpose, however, of serving clients’ investment, strategic advisory and client service needs that has brought us together in a way that we know is even more important than physical co-location.

We know also that we have a lot more to learn. There are significant unknowns: We are all observing an extraordinary effort around the world to develop vaccines and treatments. At the beginning of this crisis, it was announced that no vaccine could be ready before mid-2021 at the earliest. Now, there are discussions on a daily basis about the prospects of an earlier solution. We are watching an equity market in which some companies have recovered their March and early April declines—even without a clear indication of what the economy may look like in late 2020 and beyond. And, as we prepare for the possibility of returning to an office environment, we know that there is significant anxiety about the risks of doing so. It will not be like “flipping a switch,” where we work remotely one day and in an office the next. In a survey of our 700 colleagues, only 31 percent expressed a comfort with returning to an office in the “first wave,” and a meaningful subset wishes to hold off until a vaccine is available. We believe that businesses across the globe are hearing similar responses from their employees. At Brown Advisory, we are committed to supporting our colleagues’ interest in working in an office or at home, or a combination, based on each individual’s level of comfort. We will many lessons from this transition that will inform our activities at Brown Advisory as well as our thoughts on our economies’ ability to recover quickly.

As part of our thinking about the future, we want to recognize our colleagues’ and clients’ children and grandchildren who are graduating from schools, colleges and universities at this time. This is an important moment for them and we want to extend our congratulations. They are reminders to us of the future, and the importance of thinking beyond our serious concerns and worries emanating from the COVID-19 crisis.

At Brown Advisory, we are also celebrating some important events:

Thank you again for allowing us to share these thoughts with you. We plan to write one more weekly update next Wednesday. In all likelihood, it will be an opportunity to share with you our specific plans to begin a transition back to operations in our Baltimore office*. We need your input. What steps do you think we should take? What concerns do you have? What might we be missing in our analysis? After next week, we intend to shift to a monthly update, and would appreciate any thoughts you may have about issues or questions that you would like us to address.

The last two months seem to have gone by at an incredible speed, but with some very slow days as well. You and we have endured a great deal and, even though there are likely some tough times ahead, our ability to adapt thus far should put us in a good position for the future.

Sincerely,

 

Mike Hankin
President & CEO
 

Dave Churchill
CFO & COO
 

 

 



 

 

May 6, 2020

Dear Clients,
 

As we write our 10th client update, we do so with the recognition that the likely duration of the COVID-19 crisis will extend much longer than anyone had anticipated. We recognize how easy it is to be discouraged as we each reflect on the past, present and future of the crisis. We share concerns about family members and friends who have contracted the virus; we share sadness about those who have died; we share worries about the frontline workers who could face a second and third wave; and we share the physical and emotional constraints of the “shelter-in-place” rules. We also now face the challenges of re-opening our society and addressing the impact of all of the foregoing on the economy. At Brown Advisory, we find that, more than ever, it is important for us to “compartmentalize” our concerns and focus our energies accordingly.

The firm’s technology and operations infrastructure continues to perform at the level necessary to allow us to function effectively. We do not perceive any gap in our workflows across the Brown Advisory platform, from our investment and research teams to our client service professionals. We continue to gather as a firm each morning—700 individuals on video—to share ideas, challenge each other and even “vent” a bit. It is a very healthy exercise and one tool that we are using to maintain our energy levels and our culture. We have shared with you for many years how important we believe the elements of the Brown Advisory “DNA” are to our ability to fulfill our “Performance, Advice and Service” commitment to you. Functioning well as a team is very near the top of our DNA list, right after being a “client first” firm. We are learning new ways to maintain our team DNA and are confident that we can do so even in a remote-work environment.

Thinking in a “compartment” framework also allows us to think in a balanced way about the future. As consuming as negative pressure can be, we are keeping a close eye on strategic projects across the firm that we believe will drive a material and positive impact for our clients in the years to come. We are also inspired by the effort to develop vaccines and treatments at a rate that we have never observed before—the timelines being discussed are much shorter than telegraphed only a few weeks ago. We are inspired by the leadership of our health care workers in how they have learned to protect themselves and others from the virus. Closer to our area of responsibility, we are inspired by the companies in our clients’ portfolios that are thriving during the crisis—either because they fill a critical need or because they have quickly reinvented themselves. West Pharmaceuticals, Dexcom and Chegg are three examples of companies in this category in addition to the more “front page” examples of Amazon and Microsoft. Lastly, the markets have recovered a good deal of their earlier losses. While many of us question whether this “confidence” is warranted, it is reassuring to see the markets’ instinctive nature to look beyond the short term.

As we think about other “positives,” it has been rewarding to hear from many of our clients and colleagues on their shelter-based experiences. From seeing children or grandchildren take their first steps, to engaging successfully in online schooling, to learning about the things that we can do without, we know even while our lifestyles are being challenged, it is also possible that our lives are being enriched.

This week, we published the third episode of our Navigating Our World podcast, “Is Polarization Killing Democracy?” a conversation with Yascha Mounk, professor at Johns Hopkins University and author of The People vs. Democracy: Why Democracy is in Danger and How to Save It. As with the first two episodes (“We’ve been here before…” with Jon Meacham and “The Power of Purpose” with Tamara Lundgren & Josh Silverman), we have tried to focus on questions that are on our minds and—without taking sides—to listen for clues, thoughts and guidance on how we can better navigate our polarized times.

We want to close this update by expressing our wish that you and your families, friends and colleagues are in good health. While we know we have many challenges ahead, we believe that a focus on the future and the opportunities that will surely accompany it, is Brown Advisory’s logical path forward.

Sincerely,

 

Mike Hankin
President & CEO
 

Dave Churchill
CFO & COO
 

 

 



 

 

April 29, 2020

Dear Clients,
 

We hope that you are well. When we left our offices in mid-March, we certainly didn’t anticipate that we would be writing our ninth weekly update from home! We have, however, appreciated the opportunity to share with you our perspective on Brown Advisory’s remote operations and your feedback has been helpful in shaping our efforts to serve you better.

We want to use this week’s update to provide our thinking around returning to work at Brown Advisory’s offices in the U.S. and London.* Planning for the future has always been a critical part of Brown Advisory’s culture—intentional and organized planning helps us make the investments necessary to deliver on our responsibilities to you as clients. It was this type of planning that enabled the firm to transition to a remote environment, and to operate and communicate effectively from our homes. We are hopeful that the same commitment to planning will enable us to return in a safe and responsible manner when we are permitted to do so by local and national governing bodies in the U.S. and U.K.

Just as our concern in mid-March was to make sure that our move out of our offices took place without disruption to our investment, strategic advisory and client service responsibilities to you, we are now focused on making sure that the transition back is accomplished in a seamless fashion. We know that each step must be taken in a manner that protects the health and safety of our colleagues. To this point, we have shared our preliminary plan with all of our colleagues and are asking for their feedback on the plan via a firm-wide survey. Our colleagues’ feedback will have a significant impact on the next iteration of our plan and ensure that each individual’s concerns are being addressed.

We are fortunate that many people across the U.S. and U.K. are openly sharing their ideas and concerns around returning to an office environment. In Maryland, where we have the largest number of colleagues, several of us have participated in statewide groups formed to develop a set of best practices. We also continue to benefit from the advice of public health and health care professionals. Finally, many suggestions have come from the businesses, public institutions and research labs that have stayed open during the pandemic and have learned how to protect their employees and customers. We are confident that we will create a work environment that will facilitate safe and meaningful client interactions once in-person meetings are appropriate to resume.

As a result, our plan will include a commitment to reorganize our offices to achieve safe distancing, install automatic doors, wear masks, check temperatures, divide and rotate critical team members, and clean deeply and frequently. We will also take additional and specific steps that make sense for each office. As we continue to refine our plan, if you have any suggestions about steps that we can take, we would very much appreciate hearing from you.

Our thinking about the number of our colleagues who return to a work environment in the “post-COVID-19 peak” phase has also evolved. We appreciate that our colleagues who have health- or age-related concerns will choose to work from home for the foreseeable future. We also know that until schools and childcare facilities are re-opened, our colleagues with young children will likely need to continue to work from home. Lastly, as much as we all miss being with our colleagues, we know that a certain number of them may not be ready to engage with others until more is learned about the risk of multiple waves of the virus. We understand these concerns and are fully prepared to support them in our current remote environment. In fact, we believe that a meaningful percentage of the general workforce will opt for the telecommuting option for far longer than was earlier anticipated.

As we stated earlier, we do not know when returning to an office environment will be sanctioned, but we want to be prepared to support our colleagues and communities when those days come. We are hopeful that the reported stabilization or even decline in hospitalizations and critical cases continues, and that organizations are permitted to take responsible steps forward. We know that it is of critical importance to do so.

We hope this discussion is informative and helpful to you. We want you to know what we are thinking and the plans we are making. Please share with us any questions or thoughts that you may have.

During the past week, we were also busy rolling out the next episode of our NOW 2020 podcast. As you may recall, this series is a “substitute” for the NOW 2020 conference we had scheduled for April 21 but cancelled due to COVID-19. We hope that you enjoyed the first podcast, a conversation with the historian Jon Meacham. Our second episode is a thoughtful and substantive discussion with Tamara Lundgren, Chair, President and CEO of Schnitzer Steel and Josh Silverman, CEO of Etsy, led by our own Stephanie McCormick. Hopefully many, if not all, of you are getting a weekly email from us highlighting each new episode—if you do not think you are on our list, please email [email protected] and we will add you. For those of you who are regular podcast listeners, subscribing on your favorite platform is the best way to get each episode delivered straight to your phone.

In our last update, we ended with a reflection on the tremendous efforts of our health care professionals. We continue to be grateful for and humbled by their service to the critically ill. We also want to take a moment to think of those who have lost family members and friends to COVID-19.

Sincerely,

 

Mike Hankin
President & CEO
 

Dave Churchill
CFO & COO
 

 

 



 

 

April 22, 2020

Dear Clients,
 

We hope this week’s update finds you and your families, friends and colleagues healthy and safe. We started writing these updates to report on how Brown Advisory was operating on a remote basis and to share thoughts we were hearing from our colleagues, our investment and service partners, and our clients. We appreciate the feedback that we have received from many of you. It has shaped our thinking on a number of issues and, frankly, has helped our colleagues put some of our shared challenges in a new and constructive perspective.

We want to use this week’s update to discuss where we would have been this week but for COVID-19—hosting our seventh Navigating Our World (NOW) conference in Washington, D.C. We will close by commenting on some of the issues that we have addressed in earlier updates.

Held every other year since 2008, our NOW conferences bring together speakers from around the world to reflect on specific issues that, in a real sense, demand our attention as investors and citizens. It is hard to believe that we began our NOW conferences 12 years ago with a still-early inquiry into the investment themes behind what would later become known as “sustainable investing.” In subsequent years, we tackled issues such as the mobile phone’s increasing centrality to our lives, the evolution of oil and gas markets as a result of new drilling technology in U.S. shale oil fields, the Arab Spring, and gaps in our education and health care systems. The format has always been the same; after providing an introduction of our speakers, our colleagues sit alongside our clients rather than in front of them. NOW has been a platform for us to listen and learn together.

The theme of this year’s NOW conference was going to be the polarized times in which we live. Rather than taking sides, our intention was to reflect on the influence of “polarization” in the decision making of leaders around the world. The central questions became: How do we navigate around and through the challenges presented by polarization? How does polarization put pressure on capitalism, on environmental issues, on our corporate motives? We had planned what we still believe would have been a thought-provoking agenda of CEOs, leaders of nonprofit institutions, and influential academics to address these questions.

With hindsight, it’s fascinating to think about how much we struggled over what felt to be an early decision to put NOW 2020 on hold—in the end, we didn’t feel comfortable asking our clients, colleagues and speakers to crowd together until we better understood the COVID-19 threat. Of course, we now know even more about the seriousness of the coronavirus and that, ultimately, the conference would have been cancelled by government edict as well.

The impact of the coronavirus has certainly rearranged the issues on our minds but, we believe, reinforces even more so the need for a NOW-type experience to listen, discuss and ask questions. While we are not able to meet in a physical sense, we have launched a “Navigating Our World” podcast to consider a number of the original agenda items in the context of the challenges presented to our health and the economy by the coronavirus. The kick-off episode is a conversation with Jon Meacham, the Pulitzer Prize-winning historian with an incredible ability to put things in perspective. Next week’s episode will feature Tamara Lundgren, Chair, President and CEO of Schnitzer Steel, and Josh Silverman, CEO of Etsy in a discussion about the power of corporate purpose.

While we will not be able to listen to your questions in a live setting, we hope that you share them and your opinions with us through your client teams, emailing [email protected], or leaving a review or rating on your preferred podcast platform. As we move through the NOW podcast, we are certain that we will learn a lot from each other.

Returning for a moment to the issues that we have discussed in prior updates, the firm continues to perform on a remote basis in a manner similar to our in-office operations. For the most part, trading and transaction processing levels have returned to pre-COVID-19 patterns. However, on days where we see significant increases in volatility, e.g., around the collapse in oil prices, we see an expected spike in activity.

We continue to try to balance the significant unknown before us—our research teams throughout the firm are consumed with trying to understand which businesses will make it through to the other side of these challenging times as leaders in their industries—but also position ourselves to take advantage of opportunities that might not exist but for these times.

We have discussed before a new “select” equity strategy that we have created internally to focus on some of the highest-quality companies we cover. We are also able to buy new bond issues from this “class” of companies at spreads that would have been high-yield just weeks ago. We are pleased as well that some of our highest-conviction external managers, who had been closed to new investments, are opportunistically taking in capital in this environment. Finally, there are opportunities that appear to be developing in the distressed credit market with the prospect of producing attractive returns as companies are forced to restructure in order to survive the current economic downturn.

We have also mentioned in recent communications our concern about the increased threat of hacking during major events and disasters. Attackers try to use these situations and our emotions—stress, fear, distractedness—to their advantage. This is a constant worry for us as a firm in an industry that is consistently one of the biggest targets. We partner with world-renowned security firms and use overlapping controls to provide around-the-clock protection against attacks. During these times, we encourage all of our clients, colleagues and service partners to operate at a heightened alert level for suspicious actions. Please feel comfortable reaching out to us if you have any specific concerns or questions.

Work continues on our “back to the office” plan—we hope to have the opportunity to put it into action in the near future. We are already working on obtaining masks and testing capacity for Brown Advisory colleagues, reorganizing our offices to accommodate social distancing, and being ready to support continued telecommuting from home for a number of our colleagues. As we develop our plans, with our colleagues’ health and safety as our top priority, we are eager to learn more about the challenges others in our communities are facing in moving their workforce back to offices.

We want to close by offering our thanks and gratitude to two specific groups: Today is Administrative Professionals’ Day, which was organized originally to allow us to thank colleagues at businesses around the world who provide administrative support. These colleagues are at our sides constantly, looking out for us, and making sure that we get through each day. In the midst of the COVID-19 crisis, they have had to become even more creative in “being at our sides.” We assure you that the administrative professionals at Brown Advisory continue to go above and beyond.

Lastly, our health care professionals are constantly on our minds. As we move through this crisis, we have “met” many of the doctors, nurses and technicians through stories written in the news and on social media. Their work is critical and impressive. We are so grateful for their commitment to taking care of our families, colleagues and friends.

Sincerely,

 

Mike Hankin
President & CEO
 

Dave Churchill
CFO & COO
 

 

 



 

April 15, 2020

Dear Clients,
 

When we left our offices on March 13, few of us would have imagined that after a month of working from home, our return date would still be unknown. Like many of you, our first month was focused on making sure that we were able to function—carry on business, look after our families, participate in meetings and, in general, just get things done. For the most part, we have proved that we can function “operationally” in this manner for an extended period. This, of course, has a clinical tone to it that belies the tremendous cost that the COVID-19 pandemic is exacting from our society. We have all watched family members, friends and colleagues endure cases of the virus—some mild, some more serious. The outcomes, sadly, have been tragic for far too many across the globe. Our health care workers have been heroic, and we are told that their seemingly endless hours on the frontline are as physically and emotionally draining as those who have served on the battlefield. We think of them daily and extend to them our gratitude and wishes for their own safety and health.

As we have moved into our second month of seclusion, and while we know there are tremendous challenges ahead, we sense a discernible change in what we are hearing from our clients. Without knowing exactly when this period will end, people are looking beyond. The catalysts for these feelings may include reading about the number of research teams working on vaccines and treatments, the creativity and ingenuity of the many companies shifting their manufacturing from core products to medical supplies and equipment, or just the optimism we perceive from a person in the struggle of their life. For a growing number of people across the world, the initial shock has worn off and their focus has shifted to the future.

As discussed last week, we are experiencing this same shift at Brown Advisory. We continue to see an uptick in client interest in allocating to companies we expect to improve on, or maintain, their position of strength as we come out of this challenging period. Future-based optimism is especially apparent in strategies pointed at Sustainable or ESG Investing. As the pandemic moved into Europe, Great Britain and the U.S., much was written on whether the growing interest in “sustainable investing” would take a back seat to concerns about the virus and the economy. In fact, just the opposite seems to be happening—ESG or sustainability-based strategies are performing well and we are observing a steady and even increased interest in them. Linked here is an article—“Big Problems Require Big Solutions”—we contributed to Citywire on how public market investors can pursue impact with their capital.

There is much talk in the media and at various levels of government about how our societies can move into the next phase of responding to this pandemic and attempt to return to what we used to consider as normal. As a firm, we are starting to press forward by turning some focus to how we will bring our colleagues and communities “back together.” Getting people back into workplaces and re-opening businesses impacted by the pandemic is a necessary step, and will help our economies if done in a thoughtful way.

As such, we have created a sub-group of our COVID-19 Task Force to build a plan for our path forward on the basis of guidance from governments and health organizations, and as much scientific and medical information as is made available to us. Many factors will come into play, but two things will be paramount: (1) the safety and well-being of our colleagues and their families, and (2) our ability to deliver uninterrupted performance, advice and service. We sincerely hope that we are approaching the end of the worst phase of infection rates and hospitalizations around the world. As we move ahead, we will share our thoughts with you, and would appreciate hearing about your own approaches to this topic.

Our Brown Advisory team continues to perform at a very high level, one that we hope is apparent in our communications with you, in your interaction with your client team and by your engagement in our various webinars and podcasts. This week, we thought we would highlight a few pieces for your attention.

  • The just-released trailer for our NOW 2020 podcast—you will be able to subscribe to the podcast on various platforms (Apple, Google, Spotify, Stitcher, etc.) in the next few days. Episode 1, and an accompanying “foreword”, drops next Tuesday, April 21.
  • A Sustainable Investing webinar featuring our CIO of Sustainable Investing, Erika Pagel, as she leads a conversation with colleagues Elizabeth Hiss and Elise Liberto about how the COVID-19 crisis is affecting sustainable investing strategies and how various managers are navigating the volatility. They also discuss some of the sustainable investment opportunities we are exploring with our individual, family, endowment and foundation clients.
  • Two curated lists of companies in client portfolios that have leaned into the crisis to pursue better outcomes for people around the world—private company list here; public company list here.
  • The opportunity to sign up for two upcoming webinars from our NextGen Venture Partners team. The first—“Cutting Costs During COVID-19”—will take place on Friday, you can register here. The second—“Cybercrime amid COVID-19”— will take place on Thursday, April 23, and you can register here.

Lastly, we want you to know how much we care about each of you and hope that you and your families are in good health. Please do not hesitate to reach out to any of us if we can be helpful to you.

Sincerely,

 

Mike Hankin
President & CEO
 

Dave Churchill
CFO & COO
 

 

 



 

April 8, 2020

Dear Clients,
 
We hope this e-mail arrives finding you and your families, friends and colleagues in good health. We have been in touch with some of you who have suffered COVID-19 symptoms and we wish you a speedy recovery. We are learning anecdotally that even mild symptoms are painful and frightening.

Like many of you, we are watching the progression of the virus through the U.S. and U.K., and around the world. While the number of infections has abated in some areas, places such as New York, New Jersey, and Louisiana, are currently in the throes of the virus. Our thoughts and prayers go out to all those who have been impacted, and their families and friends. We give thanks for all of those who are working on the front lines of this pandemic, most especially our doctors, nurses, medical staff, and first responders. They are the best examples of the human spirit, dedicated to their professions, and are serving their communities in the face of great danger. To do our part to combat this pandemic, our colleagues are practicing the recommended guidelines of social distancing, and we encourage everyone to do the same.

We are now in the middle of Brown Advisory’s fourth week of 100% remote operations. Consistent with our earlier updates, our technology and communication platforms continue to provide the level of support necessary for our nearly 700 colleagues to operate from home. Our investment, strategic advisory and client service teams are well settled in their home offices and have developed new, but now very familiar, work routines. We have seen a return to more normal trading and cash processing volumes. We view this step as healthy and positive.

Even with the enormous unknown as to when our economies will return to normal, we are seeing clients increase their commitments to the equity markets as they become more and more attuned to the long-term opportunities at hand. We know, however, that each client is different—we have clients operating businesses through this environment for whom we are reducing their exposure to risk. No matter the circumstance, we are committed to a one-on-one dialogue with each of you to make sure that we are responsive to your investment needs and interests.

We have discussed before that a group of colleagues representing teams across the firm meets each morning to review our operating performance as a firm. We want to share with you that this group is now also working on a “back to the office” plan. We are not making predictions, and certainly do not know when movement restrictions will be eased, but we want to be ready to mobilize on short notice for two reasons. First, we are certainly eager to spend time with one another—it may sound cliché, but we miss our friends. Second, and more importantly, getting back to the office can help some of the people in our communities begin to rebuild their businesses. We know that there will be risks to moving too quickly, so we are fortunate that we are in an industry where working at home is quite viable. Our experience of recent weeks has proven that we have the systems in place to support remote-heavy work for an extended period, and will allow us to transition into a back-to-the-office program prudently and safely. We will provide more information on our plan in future updates.

Lastly, our colleagues continue to be eager to share their thoughts on a variety of investment and strategic advisory topics. These can be located easily on the coronavirus section of our website. Recent additions are:

  • A Strategic Advisory information guide—"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
  • A Sustainable Investing article—"COVID-19 Through an ESG Investing Lens" —highlighting 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.
  • An equity research team webcast focusing on how the technology sector is responding to, and being impacted by, the COVID-19 outbreak.
  • An Endowments and Foundations article—"The CARES Act: Impacts on Endowments and Foundations"— which discusses various provisions in the Act that are likely to be of interest to nonprofit clients.
  • An invitation to a NextGen Venture Partners webinar—“Where is the Tech Sector Going?”—featuring NextGen Venture Partner, Lisa Mayr, CFO of MicroStrategy (NASDAQ: MSTR), John Canning, Equity Research Analyst at Brown Advisory, and David Schick, Vice Chairman of Investment Banking at Stifel. You can register for the discussion here.

We are also excited to announce the April 21st premiere of the Navigating Our World podcast. Our first episode will feature an interview with Jon Meacham, a prominent U.S. historian. We feel Meacham is almost uniquely positioned to help us navigate this challenging time—to lend both a historical and leadership perspective on the COVID-19 crisis, and to help us understand the path forward

In closing, we hear from our colleagues every day how privileged they feel to serve you as clients. It is a responsibility that we all embrace with both enthusiasm and humility. If there is anything that you believe we can do to serve you better, please do not hesitate to contact us.

Sincerely,

 

Mike Hankin
President & CEO
 

Dave Churchill
CFO & COO
 

 

 



 

April 1, 2020

Dear Clients,
 
We want to begin this update by expressing our hope that you and your families, colleagues and friends are healthy, and able to “distance” yourselves in an effective manner. Our sense is that we are all dealing with the challenges of COVID-19 in different ways, but the common thread among all of us is a level of anxiety about our health and way of life that few of us have felt in our lifetimes. We hope that the team at Brown Advisory is being helpful to you, as we are committed to doing whatever we can to provide additional support.

We have clearly moved from a stage that we all hoped would be transitional to one where we recognize that our current operating environment may continue for an extended time period. Our technology, communications, trading and operations platforms are operating at our targeted performance levels, and we believe they are supporting well our commitment to provide you with uninterrupted investment management, strategic advice and client service. If you have any questions or suggestions about how we are performing, we would very much appreciate hearing from you.

Part of embracing the “new normal” is making sure that we think about—and follow through on—the different ways that we can support our nearly 700 colleagues. You have surely read in the news about the different experiences of employees as they operate from home. Across the world, some are set up in home offices that are well equipped and have few disturbances. Others are confined to small apartments with young kids, are without access to childcare, or are young adults living much more solitary lives than they have experienced before. Our colleagues fall into all of these categories and more, and all of them miss the companionship and camaraderie of working in an office environment. We certainly appreciate that these situations are safe and comfortable relative to those on the frontlines of the crisis, but we also feel a deep responsibility to make sure that “home” is still home, and that colleagues are able to take some time for themselves.

We are also very focused on making sure that Brown Advisory continues to invest for the future:

In terms of client capital, we are excited about the number of companies in our public and private portfolios that are working on vaccines, therapeutics, testing alternatives, telemedicine and related health care technology and equipment. We are fascinated by the “ramping up” of manufacturing, production and innovation across the U.S. and the globe—at a pace that few of us have ever observed.

In terms of human capital, our team continues to grow and strengthen. We added significant depth to our portfolio management teams in Boston with Chris Casey, CFA, Dave Ely, CFA and Angela Rizzo, and in Richmond with Ali Bayler. Building on the addition of Scott Carlson in New York to Brown Advisory’s family office advisory team, we announced just this week that Tom Geddes has joined the team in Baltimore. Both Scott and Tom have had extraordinary careers advising significant family offices. We are also excited to announce today that Kathleen Mack will officially join Brown Advisory later this month as head of physical security for all of our offices. Kathleen has already provided important insight to our leadership teams as we shifted to our remote operating environment.

As we have mentioned in our earlier updates, we want to make sure that you have access to our recent postings on a variety of COVID-19-related topics. These are all accessible in our coronavirus resource center and include the following:

If you have questions or thoughts after reading these postings, or on any other matter, please reach out to us. Please also feel free to share these pieces with your family members, colleagues and friends. We look forward to receiving feedback and ideas from them also.

Finally, we know we share with all of you serious concern about the people in our communities upon whom the brunt of COVID-19 and its impact might fall the hardest. The firm and our colleagues are committed to stepping up our role and doing whatever we can to be helpful.

Sincerely,

 

Mike Hankin
President & CEO
 

Dave Churchill
CFO & COO
 

 

 



 

March 25, 2020

Dear Clients,
 
We are now in our third week of having significant parts of Brown Advisory operate remotely in response to the COVID-19 threat and ten days since we moved 100% of our colleagues out of our offices. As we are certain you are experiencing as well, we are all learning new ways to get things done. Your feedback, both in response to these updates and in conversations with your investment, strategic advisory and client service teams, has been valuable to us. We hope also that these updates are helpful to you.

Our operations and technology teams continue to provide the necessary support to Brown Advisory colleagues, even at the much higher levels of trading, cash and security processing, as well as the increased e-mail, audio and video communications that we now expect to continue for the foreseeable future. Brown Advisory, in concert with many other businesses across the U.S. and U.K., is learning that we can function well from home. Teams are meeting daily via video conferencing and conducting business with a level of productivity that is similar or even, in some ways, greater than working from our offices.

At the end of last week, we also began to see a significant increase in new accounts. This uptick is evidence to us that, as stressful as the current challenges from COVID-19 are for each of you and your families, your stakeholders, and citizens around the world, our clients and colleagues are thinking about the future. How can we seize opportunities? How can we make decisions today so that several months and years from now, we will be able to look back knowing that we took some sound steps forward at a very difficult time? The disruptions that we are observing in the bond markets and the significant sell-offs in the equity markets have changed risk/reward ratios in ways that are initially shocking but, upon reflection, can be very exciting. We also find fascinating the activity across our private equity investments in response to COVID-19. We see a significant number of companies intensely focused on a variety of solutions, from developing antibodies and novel antivirals to manufacturing masks and ventilators.

One of our primary goals is to share these increasingly opportunistic thoughts in one-on-one conversations. We also want to note that we have created a resource center which reflects our most client-relevant COVID-related recommendations, procedures and investment thinking. Recent postings include:

  • An update on changes to U.S. federal deadlines for tax filings and payments
  • A series of brief commentaries from many of our equity and fixed income portfolio managers, who shared their thoughts about current market conditions and their portfolios
  • A podcast hosted by our NextGen Venture Partners team featuring our Chief Investment Officer, Paul Chew, and Ed Mathias, Senior Advisor for the Carlyle Group
  • A webinar from senior investment leaders in our private client, endowment and foundation business sharing their views on current market volatility and how we are managing balanced client portfolios during this period

Looking forward, in the next few days we will share a memorandum which sets forth the advantages of tax-loss harvesting and the rules that must be followed to ensure that the transaction delivers the desired benefits; hosting a webcast featuring Mark Kelly, a senior health care analyst on our equity research team; and posting a NextGen Venture Partners webinar focused on their portfolio companies’ progress and outlook in this challenging environment. Details on how to access these will be on the resource center. We hope that you find these pieces informative and helpful.

We want to close by reflecting on the importance of thinking about how we can help each other. Many of our clients and colleagues are isolated right now, and we are learning to appreciate that companionship at home and at work is critical to our health. We are trying hard to stay in touch with you and with our colleagues. If there is anything else that we can do in connection with our responsibilities as investment and strategic advisors, please do not hesitate to call. We want to extend our concern and offer to stay in touch more broadly—please let us know how we can help in any way during these challenging times.

Sincerely,

 

Mike Hankin
President & CEO
 

Dave Churchill
CFO & COO
 

 

 



 

March 18, 2020

Dear Clients,
 
We would like to provide you another update on our operations as we navigate the challenges presented by COVID-19. We hope that you found our previous updates on March 5 and March 11 helpful (see below for previous letters), and we appreciate the questions and suggestions that you have shared with us. This feedback is having a direct impact in shaping how we seek to meet our responsibilities to you.

Beginning almost two weeks ago, we began testing our ability for entire teams across the firm to work remotely. As the U.S. and U.K. began to shut down, we rolled our testing period into live, remote operations. Since last Friday (March 13), nearly 100% of our colleagues have been set up at home. While we are experiencing heavy loads of connectivity and transactions, we are pleased with the technology and communications support that is in place. Notably, we conducted remote trading operations on two of the busiest trading days of the year—March 9 and March 16. We believe that we can continue operations in this manner for an extended time period. For sure, we have learned a great deal already about the experience of working remotely—including the importance of connecting face-to-face over videoconferencing—but we have been able to institute necessary changes and improvements in response thus far. As an example, we are encouraging colleagues to organize communications over channels that allow people to see each other—using WebEx, Zoom, FaceTime and other “face-to-face” technology. Our internal COVID-19 Task Force continues to meet daily and is responsible for monitoring all aspects of Brown Advisory’s operations with the goal of providing uninterrupted support to our portfolio managers, analysts, strategic advisors and client service teams—so they can support you.

One of our highest priorities is staying in touch with you. Our goal is to make sure that we are responding to your needs and objectives. The best way we know to do this is by reaching out on a regular basis to every client, to listen and, with the help of the video tools mentioned above, to have a face-to-face conversation if possible. In addition to one-on-one connections, we have launched a series of webcasts (live) & webinars (recorded) to enable each of you to listen to presentations by various portfolio management and investment analyst teams. Last Friday, we provided an update to our institutional clients via a live webcast conversation with Eric Gordon, Director of Equity Research, and Tom Graff, Head of Fixed Income—if you’d like to listen to that discussion you can access it here. Tomorrow, we are recording a webinar more directly applicable to many of our private, endowment and foundation clients: It will feature Paul Chew, Chief Investment Officer; Erika Pagel, Chief Investment Officer of Sustainable Investing; and Kif Hancock, Head of International Investment Solutions Group. If you are interested in receiving this webinar as soon as it is produced, please click here.

You will also be able to find links to those discussions, and the many others to come, in the newly launched Coronavirus Information Center on our website. This page will feature a running update of actions we are taking in the areas of Investments, Operations, Communications and Events. So while Dave and I plan to collate much of this information for you in this weekly letter format, please know that this new resource is available if you want to see what is happening more frequently. 
 
We will end by saying that it is very hard to generalize our investment thinking in this forum—it really does depend on client-by-client and strategy-by-strategy situations. What we can say, however, is that our firm has managed and invested through volatile times before—in fact, decisions our teams made in both the 1999/2000 and 2008/2009 time periods led to significant runs of outperformance in the years that followed. We believe that our continued focus on performance, advice and service will serve our clients well over the next few weeks, months and years.

Again, we really appreciate the feedback, thoughts and questions you have shared in response to these letters. Both Dave and I are here for you if you think we can be helpful in any way. We send our best wishes for health, safety and comfort to you, your family and all those you care about.

Sincerely,

 

Mike Hankin
President & CEO
 

Dave Churchill
CFO & COO
 

 

 



 

March 11, 2020

Dear Clients,

Just one week ago, we wrote to brief you on the preparations that we have undertaken to protect the interests of our clients and our colleagues in the face of COVID-19 [note: the prior letter referenced here was sent on March 5, and can be found further down the page]. We write today to update you.

Our preparations have included many steps in addition to the detailed business continuity plans that we have had in place for many years. Our plans have included the ability for all employees to work at remote locations, including their homes, using Brown Advisory secure technology and equipment. We believe that many of you are also familiar with our active use of videoconferencing for client and colleague meetings, including our hallmark firm-wide research meetings which all colleagues attend four mornings each week. While we regularly subject our business continuity plans to rigorous testing, we have now, with the supervision of our COVID-19 Task Force that was formed in February to oversee our preparations, subjected our business continuity plans to sustained and active implementation. By the end of the day today, over two-thirds of our colleagues will have worked from their homes in the last seven days. Our testing included requiring our entire equity and fixed income trading teams to operate from their homes; importantly, our latest remote trading operations were conducted this past Monday without any interruption on one of the busiest trading days of this year. We believe that we are well prepared for the entire firm to operate remotely for an extended period and will continue to run a significant portion of our daily operations in this manner for the foreseeable future.

We know that the challenges presented by COVID-19 will likely exist for weeks to come. As you know, many universities and schools have decided to adopt an extended spring break and then to rely on online classroom studies into mid-April. We also will take a very conservative approach and will move any office and any colleague to remote operations if there is any concern about the spread of the disease. We are also aware that activities adjacent to our offices can be threats as well. Accordingly, last evening, we asked our New York colleagues to work from home until further notice. We made this decision after we learned that someone had been diagnosed with COVID-19 in a “co-working” space on the 3rd floor of the office building; our office is located on the 35th floor. With the solid footing provided by our business continuity plans and the testing of them, we believe that this is the right decision to make and can be accomplished without interruption in our responsibilities to you. In preparation for similar situations in other locations, we will continue our practice of having significant components of our team work remotely. We believe that taking this extra precaution will allow us to stay ahead of the current challenges from an operational standpoint.

We come to work each day excited to meet the challenge of serving an incredible group of clients. We are privileged to have the responsibility of providing thoughtful, timely and focused investment and strategic advice and the highest levels of service and support. We believe that our colleagues, our technology systems, and our business and custodial partners are well prepared to do so.

Lastly, we also think a great deal about our responsibilities to the communities in which we work and live. We are working closely with healthcare institutions to ensure that we are doing our part to help minimize the spread of COVID19. We ask for your support of the steps that we have taken.

Sincerely,

 

Mike Hankin
President & CEO
 

Dave Churchill
CFO & COO
 

 

 



 

March 5, 2020

Dear Clients,

As we learn more and more about the novel coronavirus and the disease it causes, COVID-19, we want to share with you the preparations that we have undertaken as a firm to protect the interests of our clients. We know that we must be prepared to conduct business in the face of any type of challenge, and provide our clients thoughtful, timely and focused investment and strategic advice and the highest level of administrative support and service—no matter the circumstances. We also take extremely seriously our responsibility to provide our clients and our colleagues a safe, healthy and secure business environment.

We regularly test and update our contingency plans in order to be prepared to meet unexpected events of various types. Like many other businesses, we have developed detailed plans to establish business operations at alternative locations. Our business continuity plans provide colleagues the ability to work at remote locations, including their homes, using secure Brown Advisory-provided technology and equipment. Further, we already rely significantly on video conferencing facilities and are able to connect colleagues, clients and any of our service providers by video conferencing on almost immediate notice. Finally, we have taken steps to make sure that our service partners, from outside custodians to the financial institutions through which we execute trades, are able to operate on a remote basis, just as we are.

In the current instance, we have also formed a task force comprising colleagues from across Brown Advisory to focus on the various threats presented by the spread of the coronavirus. Already, the task force has implemented additional precautions. These include, in part, reduced travel, more frequent and intense cleaning of each of our offices, and a supportive but stern policy that requires employees to seek immediate medical advice for any illness and to stay away from the office until full recovery. Our task force meets daily, and we expect additional precautions to be implemented.

The task force is guided by a mandate that the most important role we have as a firm today is to continue providing clients the advice and service you have come to expect, particularly in light of today’s rapidly changing investment climate. To that end, we must be sure to support all of our colleagues so that they can be there for you.

As part of our precautions, we must share the disappointing news that we have decided to cancel our Navigating Our World conference which was scheduled for April 21 in Washington, D.C. We simply cannot ask our clients and speakers to travel and convene, given the uncertainty of the public health landscape. We are, however, planning to share the NOW 2020 experience through what we believe will be an exciting program of online videos and podcasts. Our NOW theme— Investing Strategically in a Polarized World—remains as relevant as ever, and we look forward to sharing our plans with you soon.

From an investment perspective, we are not attempting to predict the path of the coronavirus or the near-term direction of markets. Our focus is to make thoughtful investment and, where relevant, strategic planning decisions on a client-by-client and strategy-by-strategy basis. We have faced volatile markets many times over the years, and will certainly face them again in the years to come. We build and manage portfolios knowing that challenges will rise unexpectedly, and as such we feel confident that we can capitalize on the opportunity that volatility often presents.

We are certain to learn more in the next few days and weeks about the coronavirus, COVID-19 and their impact on the health of our clients and colleagues, on our society and on the global economy. We commit to you that we will take whatever steps are necessary as a business and to do so in a fully transparent manner.

Sincerely,

 

Mike Hankin
President & CEO
 

Dave Churchill
CFO & COO