A world apart: Money managers in Mount Vernon

Enclave: Several high-finance companies have created their own hub -- and love it -- in an eclectic area away from downtown.

October 17, 1999|By Bill Atkinson | Bill Atkinson,SUN STAFF

Think of Baltimore's financial nerve center, and many picture the gleaming skyscrapers downtown, where Legg Mason Inc., Deutsche Banc Alex. Brown Inc., T. Rowe Price Associates Inc. and Mercantile Bankshares Corp. call home.

But about a mile north of the Inner Harbor is another cluster of companies that are also involved in high finance. They are tucked away in a grittier, more eclectic part of the city -- Mount Vernon.

Best known for its quaint shops, restaurants, tree-lined streets, and even occasional gunbattle, Mount Vernon has become the city's other hub to a growing number of money managers who collectively oversee $10.4 billion in assets.

There are eight money managers in all, and they handle investments for some of the largest corporations and pension funds in the country, ranging from TRW Inc., a Cleveland-based maker of electronics and engine systems, to California Public Employees' Retirement System, the largest public pension system in the country, with $160 billion in assets.

"That is wild," said Morry Zolet, senior vice president of investments at Ferris, Baker Watts Inc. "Why not work in that kind of setting? It is gorgeous."

The biggest money manager of the group is Brown Capital Management Inc. at 809 Cathedral St., which manages $4.8 billion. Second is Investment Counselors of Maryland, Brown's next-door neighbor, which manages $2.5 billion. It is followed by D. F. Dent & Co. at 2 E. Read St., which oversees $1.3 billion.

The money managers aren't the only ones that have flocked to the area. At least two venture capital firms are based in Mount Vernon -- New Enterprise Associates, and start-up Spring Capital Corp. There is also one investment banking firm, Bengur Bryan & Co.

Mount Vernon's money hub is about as diverse as the neighborhood itself. Some money managers were economists, others managed large trusts or handled investments for corporations and private clients. The managers have come from Alex. Brown & Sons, Mercantile Bankshares, and Drexel Burnham Lambert Inc.

At least four money managers have come from T. Rowe Price, including the company's former president, Donald E. Bowman, president of Bowman Financial Management Co. on 1013 N. Calvert St.

"They are good, stable anchors for the neighborhood," said Jamie Hunt, executive director of Mount Vernon Cultural District Inc., a nonprofit group that promotes the area.

"That is huge for the neighborhood."

Although many people believe that a company must be downtown to court and win business from big clients, the money man- agers in Mount Vernon debunk that notion.

"The bottom line with any money manager is results," Zolet said. "Look at Warren Buffett -- in the middle of Nebraska?"

Eddie Brown, president of Brown Capital Management, said that about 45 percent of the money the firm managed several years ago came from four clients in California.

"They looked at the distribution of our assets, and they asked us, `What are you doing in Baltimore?' " he said. "The question is, `Why did we decide to stay in the state?' "

Brown has lived here since 1973, and his firm has grown to 20 employees. He and his wife, Sylvia, own apartment buildings in Mount Vernon and are involved in numerous charities.

"Of course, I am concerned with my employees and their families," he said. "I really feel compassion a commitment to their well-being."

Brown's money management business has exploded, growing from $2.4 billion in assets under management to $4.8 billion in the past 2 1/2 years. Its clients include CalPERS, Texaco Inc. and the State Retirement and Pension System of Maryland.

The company will soon move into a 50-room historic mansion in Mount Vernon at 1201 N. Calvert St. that it bought in July. "We are out of space and plan to add a couple more people and don't have a place to put them," Brown said.

Like other money managers, Brown picked Mount Vernon because it is convenient to downtown, his home, Penn Station and restaurants. He also likes the solid, historic buildings, crafted out of brick, stone and marble -- and the cost of doing business there.

Rents in the office buildings downtown along Pratt Street near the Inner Harbor range from $25 to $30 a square foot, compared to about $15 a square foot for prime space in Mount Vernon, said Bruce Matthai, a principal at Colliers Pinkard Inc., a commercial real estate company in Baltimore.

James D. Hardesty, president of Hardesty Capital Management Inc., set up his firm in October 1995 after years of commuting downtown to Mercantile, his prior employer.

Hardesty, the bank's former chief investment officer, said he had "had it" driving each day through 10 blocks of gridlock.

"Traffic was terrible," said Hardesty, whose company manages $500 million and has nine employees. Locating in Mount Vernon "gave me 10 minutes each way."

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