Investing in markets, and lives

For Baltimore executive, philanthropy is just as important as business

  • Eddie C. Brown, founder and president of Brown Capital Management
Eddie C. Brown, founder and president of Brown Capital Management (Baltimore Sun photo by Barbara…)
April 04, 2010|By Jamie Smith Hopkins | jamie.smith.hopkins@baltsun.com

Eddie C. Brown's business is investing money, but he's also passionate about giving it.

Brown founded Brown Capital Management in Baltimore, which manages $2.6 billion on behalf of clients, and he's an active local philanthropist. With wife Sylvia, he has given large donations to institutions ranging from the Enoch Pratt Free Library to the Maryland Institute College of Art. They've spent $6 million, and expect to donate more, to launch and support a middle-school achievement program based at The Crossroads School in Baltimore.

Brown, who developed a reputation as a stock-picking star while at T. Rowe Price, started his business in 1983 and now serves as president. It's one of the largest black-owned asset managers in the country, according to a ranking by Black Enterprise magazine.

Question: It's been a turbulent few years for asset managers. How did the meltdown affect you?

Answer: Anyone in the financial services industry, certainly, was affected. ... We didn't lose any significant clients during the meltdown. But it certainly reduced our revenues. Fortunately, all of our investment services outperformed the relevant market indexes, but we were still down. So there was that kind of direct impact on fees or revenues of the firm. Fortunately, we are very strong financially as a firm. We've never had any debt. So we're in a very strong financial position, which means, unlike many Wall Street firms that had to lay off people and cut, cut, cut staff, we did not terminate or lay off a single person. So we came through intact.

Q: What's happened to your company since?

A: When the market rebounded in 2009, we participated extremely well. ... We outperformed on the downside, and we outperformed on the upside. And we gained a lot of new assets to manage. ... From year-end '08, our assets under management [through] year-end '09 more than doubled. So we had two things working very positively: We had the market significantly rebound, but also we gained, as I said, a lot of new assets under management.

Q: What are your expectations this year? Do you think we're still in recession, and if so, when might we come out?

A: Our outlook for 2010 is that the economy will recover from the recession, but that we will have a very slow, modest-growth kind of recovery. ... What you began to see in '09 is as the market looked ahead, it basically anticipated a recovery in the economy, and that is still under way. We look at a lot of the same indicators, economic indicators, as the National Bureau of Economic Research ... because they are the official arbiters of when a recession begins and when a recession ends. Most of those indicators are improving and have been for the last several months. So I think the NBER will declare the recession having ended either the third-quarter 2009 or year-end 2009. That's our guess.

Q: What do you expect will be good investments in the future?

A: We're looking company by company [at ones] that meet our investment criteria, with this longer-term time horizon focus. … We tend to find the greatest investment opportunities that meet that criteria in ... health care, technology and consumer-related.

Q: You're receiving an entrepreneur-of-the-year award this month from the Network for Teaching Entrepreneurship. Why is that group's work important to you?

A: They go into the schools and actually train teachers to teach entrepreneurship. So the schools where they are involved actually allocate a time during the regular school day for this program. ... I believe in entrepreneurship, and I think that especially low-income inner-city or African-American students often don't have the exposure to the opportunities in the business world, or what can be done if they get a good education. I think it's extremely important in terms of lifting children out of poverty longer-term.

Q: Is that part of what you hoped to accomplish when you launched the Turning the Corner Achievement Program in Baltimore?

A: The idea was to do a complete wraparound of services to underprivileged children to basically try to remove all of the obstacles in the child's way, to give the child a chance to blossom. So if there's a problem with jobs in the family, then provide services to try to help the mother or father - or both - get a job. If it's drug addiction, bring services to bear to help the mother or father in that arena. And also provide a lot of academic support throughout the school day, after school, summers, kind of a yearlong program of mentoring and academic support. And also exposure to cultural activities, whether it's going to an art museum or going to the symphony.

Q: How has it worked?

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