US-headquartered Brown Advisory, which opened an office in London five years ago, has grown client assets to over $5 billion during that period, serving more than 200 institutional clients and private customers, it has reported. In total, client AuM has risen to $46 billion, of which $41 billion is in the US.

US-headquartered Brown Advisory, which opened an office in London five years ago, has grown client assets to over $5 billion during that period, serving more than 200 institutional clients and private customers, it has reported. In total, client AuM has risen to $46 billion, of which $41 billion is in the US.

The growth of the UK-based business happened during a period that saw the worst global financial crisis since the 1930s, the firm said in a statement on its asset performance and investment views yesterday.  

“We opened our office here just as the global financial crisis hit – the timing seemed awful.  However, we were able to spend time building relationships with professionals in the industry and listening to clients, which has stood us in good stead as the crisis began to recede.  With strong performance from our strategies combined with an increased interest in US equities, we were well positioned to take on new clients,” Logie Fitzwilliams, head of international business, said.

As well as serving institutional clients outside the US through its Dublin-based UCITS IV funds and segregated tax, it also manages discretionary portfolios for private clients.

“We feel investors have been attracted by our employee ownership, boutique focus, our rigorous approach to fundamental research and highly collaborative investment process,” Fitzwilliams said.

The firm’s American Fund, launched to give broad US equity exposure to UK clients, has returned 19.9 per cent vs. the S&P 500’s return of 17.9 per cent over five years, and 33.7 per cent vs 32.4 per cent over one-year, respectively.

Outlook
“The valuation data doesn’t support a definitive conclusion that an equity bear market is imminent, but neither does it seem likely that we will see a repeat next year of 2013’s strong U.S. stock market rally, given stronger headwinds for earnings growth and the looming end of QE [quantitative easing],” Fitwilliams said, giving his outlook.

Within its balanced portfolios, Brown Advisory said it is adjusting positions, referring for example to the eurozone and emerging markets.

Simon Peck, head of UK Private Clients, said: “European equities have had a strong run in 2013, and there are still big unresolved problems regarding sovereign-debt levels, stagnant growth and persistent unemployment in a number of eurozone nations. The European economy is no longer in imminent crisis, and we believe that good investment managers can outperform if they can identify great companies with limited exposure to Europe’s macroeconomic problems.”

Paul Chew, head of investments, said: “Emerging market stocks have struggled in 2013, but we believe that reduced growth expectations for China and other countries are largely priced into emerging markets at this point.”

“Emerging market stocks are actually inexpensive relative to developed-market equities now – the MSCI EM Index traded at just 10.3 times forward earnings at the end of the third quarter.  We believe the recent cool-down in emerging market stocks has created an attractive entry point,” Chew said.