Investment Research Group

Partnering with like-minded investors to preserve and grow our clients’ capital

The BBH Investment Research Group (IRG) is responsible for manager selection, capital allocation and investment decisions across Private Banking’s client portfolio. We take a long-term, quality-oriented approach to investing and seek to partner with like-minded managers for the long term who align with our investment principles. In order to be considered, managers must share our beliefs that purchasing competitively advantaged businesses at a discount to their valuation and knowing what you own and why are the best ways to preserve and grow wealth over time. We leverage our extensive experience as we actively scour the investment universe and conduct due diligence, particularly in high-priority areas, to find those select few that meet our high bar for inclusion in our portfolios.

Benefits of Partnering with IRG

  • Partner with centralized investment team within BBH Multi-Family Office
  • One point of contact with a tenured investment team
  • Deeply held, targeted investment philosophy with a long time horizon
  • Manage client wealth for generations
  • Invest only in what we can understand
  • Remain invested through inevitable periods of short-term underperformance

  • Focus on robustness and repeatability of a firm’s investment process, rather than short-term performance
  • Growing business that regularly adds capital to our highest-conviction managers
  • See market drawdowns as opportunities to add capital

  • 203-year-old bank with 6,000 employees globally and a diverse network both from our investment team and the broader BBH business
  • Advise firms on organizational decisions
  • Extend the benefits of our network to our investment partners

How We Work with You

Manager Spotlight: Select Equity Group

Select Equity Group (SEG) is a New York City-based asset manager that was founded in 1990 on the premise that rigorous, independent research and disciplined long-term investing will generate superior returns for its clients. From its origins in the early 1990s as an investor seeking high-quality U.S. small- and mid-cap growth companies, SEG has broadened the scope of its research across the globe and market cap spectrum. SEG now manages over $40 billion in assets across long-only and long/short equity strategies that share a centralized research effort and common investment philosophy focused on owning the highest quality businesses. SEG’s strategies include small-cap, mid-cap, large-cap and all-cap mandates and dedicated U.S., non-U.S. and global portfolios, and its global client base includes endowments, foundations, public and corporate pensions, private banks, family offices and high-net-worth individuals. The firm is employee-owned and is located at 380 Lafayette Street in the NoHo neighborhood of Manhattan.
 

Reasons for Partnering with BBH

SEG views having thoughtful, long-term-oriented partners as a key competitive advantage. BBH is a best-in-class example, having anchored flagship strategies for the firm. As a partner, BBH is differentiated by its: 

Philosophical alignment: BBH practices what it preaches to external managers, guided by a consistent investment philosophy that does not change as markets fluctuate and macroeconomics fads come and go. BBH is a longtime adherent to the same investing principles practiced at SEG: a focus on high-quality businesses, concentrated portfolios and multiyear time horizons. As a result, BBH affords SEG a unique degree of autonomy and like-minded support – particularly during challenging market environments when more philosophically agnostic capital providers are less resolute. BBH’s understanding of why a strategy is outperforming – and importantly, underperforming – is critical to the team’s willingness to deploy capital into declining markets when SEG views those moments as contrarian buying opportunities.

Capital provision at scale: Rather than hedging its bets across hundreds of partners, BBH brings a uniquely high-conviction approach to manager selection; by investing its stable and growing asset base across its concentrated stable of partners, the firm is therefore able to provide significant capital to individual managers. Leveraging this scale, BBH often serves as either a crucial anchor investor (for newer managers) or fund closer (for more established strategies), in both cases allowing managers to spend less time fundraising and more time conducting research and deploying capital.

Portfolio-level due diligence: BBH is focused on understanding what its partners own and why, often conducting complementary due diligence on individual holdings and engaging in constructive lines of questioning. This stock picker’s skillset and mentality is rare among capital allocators and improves the level of discourse we are able to have regarding our research and portfolio construction. As a result, quarterly and annual meetings feel more like dialogues, not presentations, with BBH acting as a provider of not only capital, but also of additive ideas.  

What We Look For

  • Multidecade partnerships

     

  • Well-defined, repeatable, bottom-up investment approach

  • Identifiable investment edge

  • Sound temperament and judgment

  • Intellectual curiosity

  • Long time horizon

  • Alignment of interests

  • Compelling risk-adjusted returns

  • Valuation discipline

  • 99%

    Client retention rate

  • 29%

    Clients with 20+ year relationship

Investment Objective and Philosophy

BBH’s investment objective is to preserve and grow our clients’ capital in the long run. We do this by adhering to a consistent investment philosophy.

Core Tenets of Investment Philosophy
Active Management, Concentration; Bottom-Up Fundamental Research Unique View of Risk Intrinsic Value/Margin of Safety Framework Disciplined, Patient, Long-Term Ownership Perspective
Partner with managers who have concentrated portfolios in which they know what they own and why View capital impairment and inflation as biggest threats to financial health, market volatility as opportunity to buy high-quality assets at a discount to valuation Seek to invest in securities trading below their intrinsic value* estimate, creating a margin of safety** Wait for investments to realize value to achieve exceptional long-term returns; hold cash when there are no attractive opportunities and sell when investments no longer offer acceptable returns relative to loss potential
*Intrinsic value represents what we believe to be the value of a security based on our analysis of both tangible and intangible factors.
**A margin of safety exists when we believe there is a significant discount to intrinsic value at the time of purchase.

We seek to leverage our significant direct investing experience in evaluating and structuring long-term partnerships with outside managers who fit our criteria.



Suzanne Brenner Partner and Chief Investment Officer

Interested in partnering with our Investment Research Group? To learn more about the process, email us at BBH.Investment.Research.Group@bbh.com.

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This communication is for informational purposes only. The information herein has not been based on a consideration of any individual investor’s circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice. Individuals should consult their personal tax, accounting and legal advisers regarding any potential investment or strategy. Any views and opinions are subject to change at any time.

This material does not constitute an offer or solicitation in any jurisdiction where or to any person to whom it would be unauthorized to do so. PB-04766-2021-08-10.

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