Brown Investment Advisory & Trust Co. announced a major expansion yesterday to capitalize on the growth of private wealth generated by technology companies in Washington and Northern Virginia, according to company officials.
The Baltimore investment services firm said it has acquired Dunnan Securities Advisors Inc., a Washington asset management business with $100 million under management. Terms were not disclosed.
And Brown Investment announced that it will open an office in Washington early next year.
It also announced two appointments to its board of directors. They are Frank A. Bonsal Jr., founding partner of New Enterprise Associates, a large venture capital firm in Baltimore, and Joseph R. Hardiman, former chief executive officer of the National Association of Securities Dealers and the Nasdaq Stock Market Inc. Hardiman is expected to join the board in January.
Michael D. Hankin, Brown Investment's president and chief executive officer, said the expansion is being driven by "extraordinary growth of new businesses and wealth in [Washington and Northern Virginia]."
Brown Investment officials said the new office will be staffed by three people, and run by John E. "Buck" Chapoton, a Washington attorney and tax specialist.
Two years ago, Brown Investment's partners and directors bought the former BT Alex. Brown affiliate from its corporate parent. The firm had about $2.8 billion in assets under management. That figure has grown to about $5 billion today, an increase of 79 percent.
Three-quarters of Brown Investment's 400 clients are wealthy investors; corporate pensions and charitable foundations make up the rest. The average investment is $12.5 million per client, half of whom are from the United States and half from Europe. The firm employs 80.
With more investment advisory firms looking to consolidate in the United States and grow abroad, the result has been a diminishment of client services, said Hankin.
"We want the clients in [Washington and Northern Virginia] to have a seamless experience with our firm and not feel like they're dealing with a branch office," said William L. Paternotte, the Brown partner who heads business development.
Others in the investment services industry see Brown Investment's growth as a natural reaction to that trend in investment services.
"People of means like to be able to talk to their investment personnel and visit them," said Jim Hardesty, president of Hardesty Capital Management. "[Brown Investment] sees an opportunity there because there's been a tremendous amount of consolidation and relocation of the [investment services'] corporate headquarters to places outside of Washington."