Firms say their combination creates better diversified, more stable company. Investment advisory and brokerage-dealer Brown Advisory and value manager Alex. Brown Investment Management (ABIM) have agreed to merge. The Baltimore-based firms, which began as parts of Alex. Brown & Sons, say the combination makes sense in light of their common heritage, the kinds the clients they serve and their desire for increased diversification.

Terms of the agreement weren't disclosed.

More "value"

"In an increasingly treacherous investment environment, diversification across asset classes makes sense for clients and investment firms," says Dorsey Brown, a director of ABIM who founded the firm in 1974 as the asset-management arm of the brokerage Alex. Brown (now part of Deutsche Bank's Private Wealth Management division). "We believe that, over the long term, clients are best served by a strong and stable firm that combines the entrepreneurial spirit with multiple disciplines -- which is the result we achieve by joining forces."

In 1987, ABIM was reorganized as a partnership of its principals and Alex. Brown. In 2001, ABIM's principals purchased the remaining equity interest from Deutsche Bank, which had acquired Alex. Brown and its corporate parent Bankers Trust in 1998.

The combination of Brown Advisory and ABIM will manage approximately $18 billion for institutions and high-net-worth individuals and families. It will operate under the Brown Advisory name with a staff of more than 20 senior analysts.

ABIM's investment managers will join Brown Advisory's large-cap value team and continue their "flexible" approach to value investing -- meaning they're unconstrained by rigid style or sector considerations in their search for attractive price-to-value relationships in strong or improving companies.

"ABIM's people are known as original and creative investment thinkers who have successfully developed a 'flexible value' portfolio management style that has significantly out-performed the market averages over a long period of time," says Richard Bernstein, Brown Advisory's director of large-cap value.

Brown Advisory was founded in 1993 as an investment-banking division of Alex. Brown focused on financing growth companies. Brown Advisory broke away from Alex. Brown in an employee buy-out just before Alex. Brown became part of Deutsche Bank in 1998.

Brown Advisory's investment-management offerings include large-cap growth, large-cap value and small-cap growth. In addition to its proprietary investment management, it works with sub-advisors to give clients access to international equities, emerging markets, small-cap value, hedge funds, private equity and real estate. -FWR

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