Credo Wealth is proud of an investment process which shuns short-term fads and of taking a holistic view of its clients’ financial wellbeing. The result has been impressive organic growth.
Edward Chadwyck-Healey, Head of International Private Clients at Brown Advisory, explains why a high-conviction – yet flexible – investment approach is one of the hallmarks of the firm.
Brown Advisory was founded in 1993 as a division of the investment bank Alex. Brown & Sons and in 1998 we became independent through an employee-led buyout.
Our roots are in creating multi-asset investment portfolios for individuals and families. Over the last 23 years we have developed and enhanced this expertise to focus on providing each of our private clients with a fully-tailored investment solution, drawing upon our various deep and experienced investment teams.
We opened our office in the UK in 2008, and today we manage nearly £4bn in assets for a wide range of individuals, families and institutions based outside the US, including many in the UK. It’s also worth mentioning that we have developed investment management expertise to look after families with assets, residences and citizenship in multiple countries.”
We work with many different types of clients and don’t believe that any of them are typical; we pursue the goals of each of them with a customised approach and can adapt that as requirements change over time.
Some are entrepreneurs with new-found wealth from successful ventures, others are families overseeing multigenerational wealth, and still others are stewards for philanthropic foundations or endowments. Some have well-established long-term goals to achieve a certain lifestyle or solidify their legacy, while others are more focused on immediate and pressing circumstances.
We seek to build long-term relationships with all our clients so that we are well-positioned to develop and understand their long-term goals and needs as they develop over a lifetime.
We believe that in order to deliver good investment performance over time we need to have conviction in our investment decisions – over-diversification produces mediocre results.
One of the hallmarks of our investment approach is flexibility. We work with our clients in a variety of ways, from building broad, multi-asset-class portfolios to managing focused, single-strategy mandates. Typically, we use a combination of directly-held securities and specific investment strategies, managed by ourselves or other high-quality fund managers, to create the portfolio that we believe will best meet each client’s needs.
In order to support this high-conviction approach we have built a deep research team with expertise in a wide range of asset classes, including equity, fixed income, private equity, hedge funds and real estate. In addition, our analysts develop asset allocation guidance and monitor a full platform of external managers.
We seek to determine a core long-term allocation for our clients, balancing factors such as expected return, risk, diversification and liquidity, along with their investment objectives and risk tolerance. While we are fully committed to a long-term approach when managing portfolios, we recognise that volatility creates opportunity, and we seek to invest in a timely manner when conditions are advantageous.
Investment risks come in many forms, all of which we must consider when constructing and managing portfolios. Different asset classes may move together when markets are distressed, resulting in far less diversification than anticipated; and the characteristics and performance of different investments within the same asset class can vary greatly.
When we construct client portfolios we take into account the client’s specific circumstances. We aim to ensure that the portfolio reflects the client’s tolerance for different forms of risk – including short-term fluctuations in value – and that it provides the client with sufficient liquidity when needed.
Every client is served by a team of professionals who together aim to provide the best mix of skills and experience for the particular individual. We want to provide a very high level of service to clients, so we seek to maintain a low client-to-professional ratio.
Meeting schedules and regular reporting are also tailored to the client’s needs. We engage with each client at a frequency and in a manner that suits them, but quarterly meetings with the client’s portfolio manager are often the starting point. The frequency of these meetings, whether they are in-person or by telephone, the staff members in attendance, and the reports we cover are customised to each client’s requirements.
Clients also have 24-hour access to their portfolio via our client web portal, TouchPoint, where valuations are updated daily and regular reporting and analysis is available.
We encourage our clients to keep track of their investments by logging onto TouchPoint and by having regular contact with their portfolio manager. We also publish articles on a broad range of investment topics and clients can choose to receive these either in hard copy, by email or via TouchPoint.
Each year we host our flagship conference entitled ‘Navigating Our World’ (NOW). Clients are invited to learn with us at NOW by listening to experts from the worlds of business, politics, economics and defence. These speakers reflect on the changes to our global landscape over the past 12 months and, importantly, explore the possibilities going forward. We believe that examining trends and hearing from outside experts helps us make better investment decisions for clients.
Lastly, we run an annual ‘Money Matters’ course over two days each summer which is focused on investment education for our clients and their families.
We believe that an investment management firm’s best chance to succeed in unpredictable environments is through its organisational structure, investment philosophy and people. This specifically includes our ownership structure, the manner in which our investment team operates, how we construct portfolios, and the research behind our investment decisions.
Ownership: Our diverse and collective ownership (>70% of shares are owned by our full-time colleagues) allows us to make client-centric decisions aimed at building durable long-term value for our clients which in turn benefits the firm and colleagues as stakeholders.
Collaborative investment process: We believe in highly collaborative, team-oriented research and analysis that combines internal and external inputs in the investment decision-making process. We find that the greater the diversity of views and information incorporated in evaluating business models and industries, the greater the opportunity for investment success. We draw upon insights of industry professionals and knowledge from our client relationships, directors, outside shareholders and colleagues’ contacts.
Long-term investment horizon: We are long-term investors who believe many investments take time to pay off and that short-term fluctuations typically do not reflect fundamental changes. As patient investors, we seek to invest in high-quality organisations and management teams who have compelling business models and valuations. In our view, these characteristics promote long-term compounding of earnings and long-term capital appreciation.
Concentrated portfolios: We believe in maintaining concentrated portfolios comprising what we believe to be our best ideas. This assures each position has a role based on both our scenario assessments and our analysis of value. It also ensures each holding is highly scrutinised by the investment team, earning its right to be included in the portfolio versus other eligible investment ideas.”
If you would like to start a conversation with Brown Advisory please get in touch with the findaWEALTHMANAGER.com team HERE.