Part I:
T
Good Thinking Puts Clients First
Client first. This is the foundational principle, structure and behavior of our firm. We have organized ourselves as a private, independent firm because we believe it is the most effective way to truly align incentives with our clients. Good thinking is what turns that alignment into results for our clients and support for our colleagues and communities.
Clients come to us with many concerns, circumstances, objectives, risk/reward tolerances and values. Our role is to listen, then ask the right questions, then listen some more. Good thinking helps us to synthesize, reflect and solve their puzzles. The challenge — one that we embrace enthusiastically — is that no two client puzzles are the same, and all require novel thinking to develop the solution best fit for each client.
We often say investing is a team sport. In our view, teamwork delivers the best quality thinking and thus the best outcomes. Teams bring multiple sets of ears to listen for a client’s nuanced meaning. And we challenge each other to drive to a deeper level of analysis; to pursue second- and thirdorder implications; to ask questions from new or different perspectives; to diagram alternative scenarios. Good team thinking always comes back to the question: “What are we missing?”
In the increasingly complex context in which we invest clients’ capital, thinking powers Brown Advisory’s teamwork flywheel and creates value for clients through shared ideas, collective insights and a constant challenging of each other.
Good Thinking Prioritizes the Long Term
“ Our tactical and opportunistic shifts in asset allocation are informed by both bottom-up company analysis and evaluation of the macroeconomic landscape. We believe that integrating both will lead to long-term returns.”
ERIKA PAGEL, Co-CIO of Private Client, Endowments and Foundations
“ The portfolio managers who lead the relationships for our private clients, endowments, foundations and charities are thoughtful investors, first and foremost. They synthesize the deep research resources and investment knowledge from across the firm with their precise understanding of client needs to build highly customized portfolios.”
SID AHL, CFA, Co-CIO of Private Client, Endowments and Foundations
Private Client, Endowments and Foundations
INVESTMENT PHILOSOPHY
We overlay our highly customized approach on top of a deeply grounded investment philosophy. Our philosophy is characterized by:
- Deep fundamental research. We believe in the power of deep fundamental research on companies, industries, properties and assets —— and that this in-depth analysis into the value and quality of assets positions us to generate outperformance of broad markets over time.
- Quality bias. We believe that investing in high-quality securities and managers will help us compound our clients’ assets at higher rates over time while also driving long-term capital preservation. When investing in equities, for example, we look for management team quality, balance sheet quality, profitability and free cash flow, market positioning and culture.
- Concentration and conviction. In both our internal and external investment strategies, we believe we can generate better outcomes by investing in a shorter list of higher-conviction investments that we know thoroughly. We strive to set a high bar for any investment that makes it into a portfolio. Our deep work on each investment lays the groundwork for maintaining our conviction during challenging times and for sticking with and even adding to our holdings. This conviction leads to a willingness to take contrarian views.
- Patience and the power of compounding. The most dangerous enemy of performance is our human instincts —— the impulses of greed and fear. Perhaps the greatest asset we have as investors is time, and the greatest attribute is patience, particularly when paired with conviction. We focus on making long-term decisions, and we will often make fewer of them than our peers.
- Intellectual flexibility and a willingness to learn. While we believe in the power of active management, not every client will have 100% active investment strategies in their portfolio —— sensitivity to fees, liquidity, taxes and volatility may dictate otherwise. That is part of the customization.
While we are dedicated to the idea that certain elements of investing are impervious to time, many of the ways in which we practice investing are changing by the day. As investors, we must constantly evolve for the benefit of our clients.
“ I am continually inspired by the collective thinking that underlies our partnership with clients. Our colleagues sincerely care about working together to create the best solutions for clients. Their desire to collaborate drives the client experience.”
CHARLIE CONSTABLE, Head of U.S. Private Client, Endowments and Foundations Business
In addition to individuals and families, our Private Client, Endowments and Foundations business serves a number of groups that have specific and specialized needs:
Nonprofits and Charities:
Our team partners with local nonprofit clients to understand specific investment goals and organizational challenges. For each client, we deploy an individualized investment solution, combining access to top-tier managers, customized portfolios, performance monitoring and reporting, and strategic advisory services to support governance and fiduciary oversight, philanthropic consultation, mission-aligned investing, and board education and functioning.
Family Offices:
We partner with families —— who are often multi-generational and global —— to help them think through essential questions about their financial lives and legacies, then serve as the quarterback to manage all of their longterm financial infrastructure and day-to-day activities. Partnering closely with additional family advisors, we oversee the execution of complex investment, legal, accounting and tax structures across businesses, trusts, real estate, and other physical and financial assets.
Americans Living Abroad:
U.S. expats are in the unenviable position of being taxed on worldwide income and gains. We have developed particular expertise to help U.S.- connected clients build comprehensive cross-border investment programs that optimize both investment quality and tax efficiency.
Business Builders, Inventors and Innovators:
The genesis of our firm was building a team to support the investment and planning needs of a renowned inventor and entrepreneur. Our future will likely be shaped by thinking about the inventors and entrepreneurs imagining new ideas and building great businesses. In our work with some of the most innovative business builders, we partner to help them make thoughtful decisions about their future —— providing ideas to guide the development and execution of their long-term plans, delivering compelling investment results and bringing an intensity to our relationship that allows them to feel confident about their family’s future. Our aim is “sweat the details” so they can focus on growing their businesses.
Thinking with
BALANCE
About half of Brown Advisory colleagues are under the age of 35. Their fresh approach works for clients because we couple their energy and drive for learning with a group of seasoned Brown Advisory investment professionals —— who are equally energetic and committed to learning. Two cases in point are Jane Korhonen and Eben Finney. Jane, a Washington, D.C.-based portfolio manager, and Eben, a portfolio manager based in Baltimore, both joined the firm 30 years ago.
“This is an intense place,” says Jane. “We have high expectations for each other, but also we lean on each other, we make an effort for each other.” She cites the numerous formal structures and informal opportunities for connection and learning —— such as the weekly private client investment meeting that she leads, daily investment pod meetings and working groups, along with continual collaboration and sharing of investment ideas. She says, “These settings help colleagues find their investment voices and help us improve the odds of growing successful investors.”
According to Eben, “It takes intensity to be successful in this business, to continue to evolve as investors and to figure out what is the right thing to do for clients.” Now working with the third generation of some of his clients, Eben says, “We develop special bonds with our clients; these often turn into lifelong friendships.”
Eben and Jane are both emphatic about the importance of mentorship and the value that it offers to clients.
As Eben says, “Our team structure means we are always pushing each other to grow and evolve —— and enables us to bring a greater level of expertise and the benefit of various perspectives to our clients.”
Thinking in
PARTNERSHIP
We built our firm around the idea that an investment program is most helpful when integrated with broader strategic advice and first-class service.
For private clients, our strategic advisors serve as thinking partners, helping to optimize tax, estate, generational, philanthropic and business planning —— taking into account each family’s specific approach to governance and values. Their expertise extends to matters related to sustainable and impact investing, next-gen education, business and compensation structure, and asset protection strategies. Often, this means helping clients think through complex challenges, develop frameworks to make decisions and build a vision for what their future could look like. These partnerships between clients and Brown Advisory teams, built over years and sometimes decades, regularly develop into profound and meaningful relationships.
“ It is an enormous privilege to work closely with families and be their first call when a life event transpires —— and then to problem solve to find a thoughtful, thorough solution that really works.”
BRIDGET FITZGERALD and ARIEL FORTUNATO, Strategic Advisors
Our client service professionals are the backbone of each client team. They are typically clients’ first call when they have questions, concerns or news to share. They are a group that includes lawyers, MBAs, CFAs, CAIAs, Masters of Taxation, Masters of Trust and Wealth Management, Certified Financial Planners, and Certified Trust and Fiduciary Advisors. This translates to technical expertise in investments, fiduciary oversight, trust management, estate administration, tax compliance, compensation plans, philanthropy, portfolio analysis and the attention to detail and execution that clients need and deserve.
AYAN ADU, Private Client Senior Relationship Associate
STEPHANIE SONG, Private Client Relationship Advisor
Individual client teams —— made up of portfolio management, strategic advisory and service professionals —— can come from anywhere across the firm. Geography and proximity to the client is certainly important but more critical is the alignment of expertise to the need, with the goal of building meaningful, longterm partnerships.
Andrea Ayres and Tom Geddes are based in Charlottesville and Baltimore, respectively, but partner with family offices across the U.S. and globally to design solutions for clients’ complex investment, generational planning and financial reporting needs.
Lauren Dell moved to Nashville from New York to bring the firm’s strategic advisory approach to our new office.
“ We are very conscious and careful about the way we expand into different markets, such as here in the Carolinas. We want to ensure that we are building trust each step of the way, so our clients understand that we are entering into a true partnership.”
TREY TUNE, Portfolio Manager
Good Thinking Drives Outcomes
While we do not use models to construct portfolios, it can be helpful to aggregate similar portfolios to gain a sense of general performance. On a net-of-fees basis, our U.S. and U.K. teams have delivered strong relative performance over time.
“ To be effective investors for our clients, we need to slow down and think. We have to constantly challenge thought processes, understand context and ask, ‘What does this mean?’ In this humbling business of investing, taking time to think with our teammates is imperative.”
PAUL CHEW, Chief Investment Officer
AS OF DECEMBER 31, 2023
AS OF DECEMBER 31, 2023
“ As we construct portfolios for our clients, we have the benefit of spending time with and learning from some of the best managers around the world. It’s our job to synthesize these insights so that we make thoughtful investment decisions in our effort to deliver first-rate performance for clients.”
KIF HANCOCK, Chief Investment Officer for International
“ While we are always focused on delivering investment performance, our clients’ non-financial goals can be just as important to them. We partner closely with clients to first understand and then help actualize outcomes around vision, impact, philanthropy, and generational engagement and education.”
DUNE THORNE
Chief Strategy Officer of U.S. Private Client, Endowments and Foundations Business
Good Thinking Simplifies the Complex
Long-term outperformance in the individual strategies we manage for institutions comes from combining deep thinking with a measure of common sense. Our institutional clients —— endowments, foundations, pension funds and financial institutions around the world —— hire us to manage and generate outperformance in a specific asset class. They expect us to deliver on our promise of rigorous fundamental, bottom-up research; high-conviction investment ideas; and a rigorous, persistent process.
CHRIS BARTLETT
Co-Head of Institutional Business
TIM HATHAWWAY, CFA
CIO for Institutional Investments and Co-Head of Institutional Business
DANIEL MOONEY, Director of Equity Research; KATHERINE KROLL, Director of Equity Research, Sustainable Investing
The companies and issuers in which we invest our clients’ capital operate in challenging markets and face complex issues. As long-term, performance-focused investors, we must carefully consider the challenges and opportunities that may impact businesses in the decades to come. To understand the risks, as well as the opportunities, our research team must ask the “right” questions, connect the “right” people, articulate a novel thesis, try new things, reflect on the past, and avoid assumptions and destructive bias. Good thinking distills an incredible amount of information into a thesis —— separating signal from noise, creating clarity from chaos.
Thinking expands
FRONTIERS
While our roots are in U.S. equity investing, the growth of our global platform exemplifies our belief in the value of humility and the importance of challenging each other. When we opened our London office in 2007, our thinking was that it would be important, as investors and owners of the firm, to ask questions from a non-U.S. point of view and to question our assumptions about our global outlook. In addition to being bases from which we serve local clients, our offices in Frankfurt, Singapore and Tokyo push us to think in new ways.
WALTER BECKETT, Head of Asia Pacific
NICOLE NESBITT, Head of Global Institutional Client Service and Head of Mutual Funds
We partner with institutions around the world that are seeking low-turnover, concentrated portfolios with the potential to drive attractive risk-adjusted returns over time.
TOSHI MURASAWA, Head of Japanese Distribution
CHARLIE VAN STRAUBENZEE, Head of European Institutional Sales
ELISA WAGNITZ, Head of DACH (Germany, Austria, Switerzerland) Region
Our institutional clients include:
- Pension funds
- Endowments
- Foundations
- Banks
- Investment advisors
- Financial service firms
- Family offices
- Sovereign family wealth funds
Good Thinking Drives Results
We manage a broad range of active public equity and fixed income strategies which are packaged and delivered as Mutual Funds, UCITS Funds, SMAs, Model Delivery, and CITs.
On a net-of-fees basis, these 10 strategies have delivered annualized outperformance over their benchmarks since inception.
Benchmarks | Flex: S&P 500 | SCG: Russell 2000 Growth | SCFV: Russell 2000 Value | LCSG: Russell 1000 Growth | MCG: Russell Midcap Growth | SCFI: Bloomberg U.S. Agg. | GL: MSCI AC World Net Return | SSCC: Russell 2000 Total Return | GF: MSCI World Net Return | LCSV: Russell 1000 Value
Sha Huang is one of the many Brown Advisory “grow our own” stories. Now a consumer analyst on the equity research team, Sha first came to the firm in the 2015 summer analyst class.
During his summer, Sha worked on a research project with Ken Coe and the other financials sector analysts. “We ended up investing in the company that I was analyzing,” notes Sha. “It was amazing to have a chance to work on a project like that as an intern who knew nothing when I walked in the door.”
After graduating from Vassar, Sha joined the firm full time as a financials analyst. “When I left to go to business school to study value investing at Columbia five years later, it was a super difficult decision to leave —— but it made me a more wellrounded investor.” Last year, Sha rejoined Brown Advisory’s research team, this time covering consumer companies. According to Sha, “I hope to eventually become a portfolio manager, so I feel very fortunate to have the opportunity to cover and learn about another industry sector. But the bottom line is that I just wanted to be back in the Brown Advisory culture.”
Addressing tough and polarizing issues, when criticism can be fierce, requires conviction. Conviction requires asking the toughest questions and challenging the assumptions of an investment thesis. In addition to sector analysts —— with deep knowledge of the companies, markets and dynamics of their industries —— we also employ analysts to conduct investigative fieldwork. These in-depth projects, designed to answer specific investment questions, deliver insights that can lead to validating or casting doubt on an investment thesis as well as providing a deeper understanding of an important trend that may affect companies across our portfolios. This work is helping us think through the winners and losers in the energy transition, the impacts of geopolitics on the semiconductor industry, antitrust regulation and much more.
We will go anywhere to learn more about potential opportunities and risks associated with our investments. Recently, members of our fixed income industrials team attended a conference of cement manufacturers to validate what the team viewed as a significant investment opportunity in the sector. “We were the only investors there,” observes Katja Dunlap.
Priyanka Agnihotri studies businesses that operate all over the world. She believes you can find world-class businesses at opportunistic valuations in industrials, health care, financials and beyond.
Before joining Brown Advisory in 2015, Priyanka tried starting several businesses. “I learned that you can be interested in something intellectually, but you have to match your interests with skills to be successful.” Fortunately for Brown Advisory’s clients, managing an equity portfolio aligns with both for Priyanka.
And it is clients that drove the firm to launch the Sustainable International Leaders (SIL) strategy three years ago. They wanted a global ex-U.S. strategy to diversify their U.S. equity allocations. SIL focuses on generating superior risk-adjusted returns by investing in companies that have strong business models with sustainable competitive advantages, run by strong management teams, at attractive valuations. “From a sustainability perspective, we want to invest in companies that are part of the solution, not the problem,” says Priyanka. She stresses that teamwork and continual learning are essential to the investment process. “We have a constant flow of ideas across the team, which makes us better investors. I encourage analysts to come to me with crazy ideas and to challenge my thinking.”
When speaking about the portfolio that he manages —— the Flexible Equity strategy —— Maneesh Bajaj stresses, “We try to stay rooted in common-sense thinking and sound financial principles: buy attractive businesses —— at bargain prices —— that should grow in value over the long term.”
This approach has served clients well. If a client had invested $10,000 into Flexible Equity when it launched 40 years ago, it would be worth almost $1.3 million today, compared with about 616,000 for the S&P 500.
When Maneesh took over managing the strategy in 2016 from long-time portfolio manager Hutch Vernon, he inherited not only an investment philosophy and process but also loyal clients. Says Maneesh, “I’m grateful for Hutch demonstrating his belief in me —— it was essential to our clients having confidence in the transition.”
It helped, no doubt, that Maneesh had honed his skills as a financials and technology analyst —— including making some notable early “buy” recommendations for Salesforce and Amazon that resulted in significant returns for clients.
It also helped that, like Hutch, Maneesh remained true to the teachings of Warren Buffett and Charlie Munger, long-time “muses” for the strategy. Says Maneesh, “We have tried to learn all we can from these legendary investors —— find good businesses with quality management teams that are shareholder friendly. Make sure you’re not overpaying for those businesses. And always remember: Time is your friend.”
FLEXIBLE EQUITY PERFORMANCE
Cumulative growth of 100 since inception —— delivering 50% excess returns over the benchmark, gross of fees.
Thinking with
CREATIVITY
Often, the new investment strategies that we launch are driven by what our clients tell us they need. For example, we launched our Large-Cap Sustainable Value (LCSV) strategy because clients told us they could not find a high-quality option in this asset class. Our expertise and history across large-cap, value and sustainable investing positioned us well to create a solution. Managed by Mike Poggi, the strategy was seeded with capital not only from the clients to whom we were responding but also from our colleagues themselves, who believed in the portfolio management team even without a demonstrated track record in the specific asset class. Any new venture requires creative thinking —— LCSV was only possible because of the flexibility of our investment team, the trust of our clients and the support of our partners.
Our newest strategy, Large-Cap Sustainable Value, uses primary sustainable research to uncover Sustainable Cash Flow Advantages (SCFA) that are overlooked by the market.
Good Thinking Appreciates "Risk"
Investing in private markets often requires a long-term “lockup” of capital. This is considered a “risk” by many, as it reduces optionality and the overall liquidity of one’s affairs. Over many cycles, however, privatemarket investments have demonstrated their ability to outperform public (i.e., more liquid) markets. This is the “illiquidity premium” that powers the asset class and the reward for thinking about and appreciating the risk at hand.
“ In our private investment advisory business, we have the privilege of partnering with clients to help them think through and construct bespoke private investment portfolios. We have grown our team significantly so that we can support clients with custom solutions that can include serving as OCIO (Outsourced Chief Investment Officer) and providing exposure to specific investment themes, joint ventures, direct company investments, multi-manager funds and single-fund investments.”
JACOB HODES, Chief Investment Officer for Private Investments
We are always thinking of new ways to provide the benefits of private market investing to clients who can meet a broad range of performance objectives and tolerance for risk. One example is Private Equity Partners (PEP) which uses a vintage approach in an effort to address concerns around the cyclical nature of returns —— it is hard to time these markets, so we created a program to take the "animal spirits" out of the equation. Now in its 12th vintage, PEP portfolios blend a full complement of capital appreciation exposure —— incorporating buyout, growth equity and venture capital —— and are designed for regular and annual commitments from clients with the goal of becoming self-funding over time. PEP has served as an important flag in the ground for our private investments group, and the team has created other asset class–specific strategies as well as a direct investment program to provide access to individual deals.
For other clients, often institutions and prominent families, we construct bespoke portfolios combining our differentiated access to managers and companies while initiating proprietary strategies.
We added analysts —— including Nicole and Shaily —— so that we can support clients with custom private investment solutions, such as serving as OCIO.
NICOLE WHITE and SHAILY SHAH, Private Equity Analysts
Multi-manager Solutions
Concentrated portfolios of high-conviction ideas
PEP
PRIVATE EQUITY PARTNERS
Buyout, growth equity and venture capital
PIP
PRIVATE INCOME PARTNERS
income-generating private credit
PIP
PRIVATE INCOME PARTNERS
income-generating private credit
VCP
VENTURE CAPITAL PARTNERS
emerging and established venture
iCAP
INNOVATIVE CAPITAL PARTNERS
venture with implications for health and climate
REP
REAL ESTATE PARTNERS
value-added real estate across property types
JON BASSETT, Managing Partner, NextGen Venture Partners
Collective thinking powers NextGen Venture Partners, our early-stage, network-driven venture strategy. Focused on three main sectors —— reinventing health care, the data economy and B2B software —— NGVP has built one of the leading early-stage networks, made up of more than 1,600 business builders. These venture partners help source investment opportunities, provide insights to improve investment decisions, and deliver important mentorship and connections to portfolio companies —— which translate to enhanced outcomes for investors.
Good Thinking Drives Performance
Private investments have historically generated meaningful outperformance relative to public equities, and over the last 20 years, the median U.S. private equity fund has generated returns 550 basis points ahead of the S&P 500. Top-quartile funds have yielded an incremental 8–10% of excess returns over the median manager over time, underscoring the importance of selecting and gaining access to top partners.
“ We’ve been investing in private markets and serving leading private investors since our firm’s founding. This legacy makes a difference in terms of our access and especially in terms of our ability to be thoughtful about constructing private investment portfolios.”
DOUG GODINE, CFA, Head of Private Client Business Development
“ In our work with founders and business builders here in the Bay Area, they are often attracted to our private investment capabilities. These capabilities not only differentiate our investment offering; they can add meaningfully to our ability to achieve long-term performance for clients.”
MEREDITH SHUEY ETHERINGTON, Head of San Francisco Office and Portfolio Manager
Thinking sources
IDEAS
Our collaborative approach to investing means clients are able to source investment ideas throughout the firm.
Together, the whole firm collaborates to make sure our clients benefit from long-term thematic tailwinds as well as opportunistic trades and market dislocations. Many ideas come from a deep network of investors around the world, including our clients.
JORDAN WRUBLE and the Investment Solutions Group who cover hedge funds, alternatives and investment strategies in every asset class.
ADAM MANTIN, CFA, and the Family Office team who pursue intensive analysis of private investments with uncommon structures.
EMMY WACHTMEISTER, CFA and the technology sector research team who cover some of the fastest growing companies in the world.
TERRY BEATY and the Washington D.C. team who have deep and specialized experience in real estate.
Thinking catalyzes
INNOVATION
Private investing has always been a core pillar of our investment platform. Private markets often are the birthplace of innovation, and we regularly find entrepreneurs at the nexus of disruptive trends —— artificial intelligence, digital health, computational biology, climate technology and more.
Through our corporate balance sheet and in combination with ecosystem partners, we invest in early-stage startups and venture capital funds. Since the founding of our firm, we’ve supported entrepreneurs and venture capitalists who are focused on innovating every frontier of the economy —— from health care to consumer applications. Many of these entrepreneurs and fund managers are members of groups that have been underrepresented in finance over time, and we are committed to a broad aperture that has enabled us to support teams across several sectors.
In addition to financial capital, we offer entrepreneurs access to the Brown Advisory ecosystem —— including the opportunity to pilot products, connect with prospective customers, obtain public-market insights, receive amplification for their stories through our communications channels and even use our offices at no cost. No doubt, we learn as much or more from these emerging business builders as they do from us: They are championing the future, and their new ideas and approaches catalyze our own innovation.
Private market corporate balance sheet investments expand our knowledge, make an impact in the communities in which we live and work, and expose us to novel ideas.
Elise Liberto, Managing Director of Private Investments, oversees the firm's corporate balance sheet investment program. She interviewed Marc Andreessen, Co-Founder of Andreessen Horowitz, at Navigating Our World (NOW) in San Francisco.
Thinking leads to
LISTENING
We manage more than $5 billion of OCIO (Outsourced Chief Investment Officer) assets for nonprofits and charities. Our OCIO clients tell us that they value our dedicated team of professionals, rigorous investment process and focus on long-term investment performance. Notably, our clients appreciate our willingness to listen and customize our approach based on what we understand to best fit the needs of their investment committee and staff. Our goal is to deliver to our clients the investment performance that will enable them to focus on their mission and impact. We do this through a commitment to thoughtful and informed decisions about asset allocation, manager selection and tactical positioning. Our OCIO portfolio managers work closely with our Investment Solutions Group in performing research, analysis and monitoring of external managers across all asset classes and geographies.
The outcome for our OCIO clients:
access to best-in-class investment solutions and risk management tools along with a customized outsourced investment approach based on transparency and collaboration. And, it all starts with listening.
ISG team members
Thinking leads to
CLARITY
The sustainable investing landscape is another arena in which we have partnered with clients to bring what we hope is common sense to what can sometimes seem like chaos. Clients hire us to focus on investment performance —— full stop. They look to us to help understand fundamental financial drivers versus what qualifies as simply “noise” —— some of which may be generated by political agendas rather than by assessing opportunities for investment performance.
As investors, we will examine any consideration that may help us gain a deeper understanding of a company or issuer’s risks and opportunities —— including, in our sustainable investment strategies, risks and opportunities that arise from the effects of natural resources, climate, human capital and governance. Our goal remains to deliver the investment performance that our clients expect and deserve —— which requires intensive, creative research; analysis of a wide swath of information; and thoughtful, considered decision-making. To do anything else would not be fair to our clients.
“ When you walk around our offices, you can see and feel our colleagues’ determination to think analytically —— individually and collectively. It’s a level of intensity that is palpable.”
LOGIE FITZWILLIAMS, Head of International Business and Global Head of Sales
Shorthand and Shortcuts
A label illuminates very little,
if anything at all, about an investment approach.
KARINA FUNK
Chair of Sustainable Investing;
Co-Portfolio Manager of Large-Cap Sustainable Growth
“A label such as ESG —— or other shorthand labels such as growth or value for that matter —— does not dictate a homogeneous investment process. Jumping to conclusions about an investment approach based on a label is antithetical to the intellectual curiosity and hard work that are hallmarks of active management.
As stewards of our clients’ assets, we take great effort to answer an expanded set of questions about companies to understand if a business is getting stronger, if it has high barriers to entry, if it can attract and retain the right talent, if it has a high-quality management team, if it is doing more with less and if it is prepared for a world with greater challenges and fewer resources. One could call these ESG issues, or fundamental opportunities or existential risks. It shouldn't matter what you call it —— our results over time have benefited from the fact that we look for information and review data sources that many other investors may ignore.”
As an investment firm, we view climate issues through the lens of our fiduciary duty to generate attractive investment returns that help our clients achieve their goals over the long term. This longterm lens requires an analysis of how climate and other sustainability challenges may strengthen or weaken an investment case. Given our role as investment advisor, we have a responsibility to look at any and all data —— which, for us, thinking as capitalists, includes potential climate-related risks, costs and opportunities —— relevant to driving investment performance.
From an operational perspective, our focus is on monitoring and reducing emissions and contributing financially to climate-positive projects that can help offset emissions that are unavoidable in the course of serving our clients. All our newly developed office space must meet the highest levels of LEED and BREEAM certifications.
Our operational carbon emissions in 2023 were approximately 4,750 metric tons of CO2e. This number is attributed to about 1,150 mt CO2e of Scope 2 emissions related to electricity in our offices and 3,600 mt CO2e of Scope 3 from air travel to connect with clients, colleagues and companies in which we are investors. Consistent with prior years, we purchased Renewable Energy Certificates (RECs) to match electricity use for the year related to Scope 2 emissions and pursued offset projects to address Scope 3 emissions.
Thinking with
INTENTION
CAREY BUXTON, Head of Sustainable Investing Business and COO of Institutional Business
In an effort to offset our emissions, we strive for a diversified portfolio of high-quality projects that are backed by rigorous science and monitoring and incorporate secondary benefits such as biodiversity and human health. The Giving Trees (pictured here) helps small communities plant trees to create a nature-based carbon system that helps train leaders and pull families out of poverty.
Thinking leads to understanding our
RESPONSIBILITIES
Brown Advisory is proud to be the founding partner of the Responsible Investment Forum (RIF), designed by Tortoise Media, the Rothschild Foundation and the late Lord Jacob Rothschild, to bring together some of the most thoughtful and innovative business leaders, academics and investors to explore the role that investors can play in producing positive public outcomes.
Against a backdrop of global instability, war in Europe and shaky U.S.–China relations, how can private capital owners, managers and fiduciaries navigate the risks and opportunities, make responsible investment decisions, and maintain positive outcomes? These are among the questions that RIF seeks to address.
Led by an advisory board that includes Karina Funk, Brown Advisory’s Chair of Sustainable Investing and Co-Portfolio Manager of the Large-Cap Sustainable Growth strategy, the Forum asks: Is it time to fundamentally rethink how asset owners and managers put money to work?
Tortoise Media —— founded by James Harding, former director of BBC News —— aims to create a space where debate and engaged disagreement can make a genuine difference.
James Harding, Editor and Founder, Tortoise Media; and Kate Gordon, CEO, California Forward, and member, Brown Advisory Sustainable Investing Advisory Board; in conversation at the Responsible Investment Forum
Thinking requires
INDEPENDENCE
When we established our firm more than 25 years ago, we made a commitment to an outside board of directors, even though there was no regulation or even convention for a private firm to do so. Today, we are even more passionate about the accountability and benefits that an outside board provides —— for all of our stakeholders. Our directors share diverse perspectives on strategic issues, question our assumptions and challenge us to be the best.
In addition to the directors of Brown Advisory Incorporated, who are listed above and govern our entire business, we have boards that oversee specific areas, including boards of directors for Brown Advisory Limited (our international business), Brown Advisory Funds (our U.S. mutual fund business), Brown Advisory Funds plc (our UCITS business), Brown Advisory Trust Company of Delaware, Brown Investment Advisory & Trust Company, Brown Advisory (Bermuda) Limited, and Brown Advisory (Ireland) Limited, and advisory boards for our Sustainable Investing and International Businesses. While only some of these boards are regulatory in nature, they all share our firm’s commitment to maximizing accountability and transparency for the benefit of our clients.
GO BACK:
Letter from the CEO
