Brown defies difficult times, makes its move

Investment company adds brokerage, is relocating

`We have got a lot of depth'

New headquarters set at Bond Street Wharf

October 13, 2002|By Bill Atkinson | Bill Atkinson,SUN STAFF

Despite the sluggish economy and tumbling stock market, the investment firm Brown Investment Advisory & Trust Co. is doing something few in the business would dare - expand.

The ambitious Baltimore-based company has formed a brokerage arm that is to open tomorrow and plans to hire 18 brokers next year.

It is also moving its headquarters this month from 19 South St. to Bond Street Wharf, a large new building in Fells Point.

"We believe it is an opportune time" to expand, said Michael D. Hankin, chief executive of Brown Advisory, which oversees about $4 billion for wealthy families, pension funds, endowments and corporate clients. "You have got to take advantage of the time."

The company has been doing just that in the teeth of one of the worst market slumps in history.

In April, Thomas Schweizer Jr., former head of Deutsche Bank Alex. Brown's private-client division, joined the company.

Schweizer oversaw about 1,200 employees and focused on wealthy investors before retiring from Alex. Brown in March.

Brown Advisory also added J. Michael Connelly, another Deutsche Bank alumnus, who was chief operating officer of the private-client division.

The two executives were hired by Brown Advisory for their connections and for their ability to attract assets and to start and build the company's brokerage operation, Hankin said.

"You don't just jump into the brokerage business; you have to have good people," he said. "I think we have got a lot of depth."

Schweizer and Connelly are making an impact. They are starting Brown Advisory Securities LLC, a full-service brokerage, and plan to staff it with 18 brokers, three of whom will work in Brown Advisory's Washington office.

"We can step right in and bring substantial assets to the firm right away," Schweizer said. "We think we can get a larger share of the clients' assets."

Schweizer has been named president of the new brokerage unit and Connelly its chief operating officer.

Brown Advisory offers asset management, mutual funds, trust and tax advice, but clients wanted the brokerage service, Hankin said.

"How do we grow the business?" Hankin said. "We look to what our clients are asking for."

Gordon Croft, vice president and director of Croft-Leominster Inc., a competing Baltimore-based money management company, said expanding in a weak market might work in Brown Advisory's favor.

"I think they will be successful," Croft said. "They can really get very successful brokers that probably have a book of business. They have got the pick of the litter right now. I'm just surprised somebody hasn't done it earlier."

Some of the new hires could come from Deutsche Bank Alex. Brown, where Schweizer and Connelly most recently worked.

The two spent the bulk of their careers - more than 30 years - at Alex. Brown Inc., the Baltimore-based investment banking company that was acquired in 1997 by Bankers Trust Corp.

In 1999, Deutsche Bank AG, a large German bank, bought Bankers Trust and Alex. Brown. Since then, Alex. Brown's operations have been dismantled, but it maintains a large brokerage operation in Baltimore.

James Hardesty, president of Hardesty Capital Management Inc., thinks Schweizer could take brokers away from Deutsche Bank Alex. Brown.

"These Alex. Brown brokers ... are certainly being sought by any number of high-quality firms, which likely would include Timmy Schweizer," Hardesty said. "Having been their former leader, [he] knows their strengths and weaknesses better than anybody else."

Like nearly every other money-management company, Brown Advisory faces an uphill battle as the stock market continues to plunge. But the company, which has 81 employees, has been growing and plans to add 25 employees next year.

It also hopes to double its assets under management in the next five years and continue to add clients. It now has about 400.

The expansion "is a big deal for us," Hankin said. "It is an opportunity to build a new business."

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