By Jeff Benjamin
One of the first things you notice upon meeting Eddie Brown, the 81-year-old founder of the $17.5 billion Brown Capital Management, is his knack for putting people at ease.
“Who is this Mr. Brown you’re talking about?” he jokes, insisting on being called Eddie.
As his longtime friend Sen. Raphael Warnock put it, “What’s striking about Eddie Brown is his humility.”
“When you meet him, you would never know he’s achieved so much, but he’s one of the most extraordinary people I’ve ever met,” said the Georgia senator, who used to be the pastor of the church Brown attends in Baltimore.
Detailing the many achievements of Eddie Brown — the recipient of the 2022 InvestmentNews Excellence in Diversity, Equity and Inclusion Lifetime Achievement Award — could start at just about any point in his eight decades of moving forward, sometimes against the odds and sometimes with a fortuitous wind at his back.
The son of a 13-year-old unwed mother, Brown was born into a home in Apopka, Florida, that didn’t have electricity or indoor plumbing.
Mostly raised by his grandparents and strongly influenced by his mother’s older brother, the young Eddie Brown was running moonshine before he was a teenager.
The family moved to Allentown, Pennsylvania, when Brown was in middle school, and he credits the persistent intervention of a second cousin for steering him away from “fast cars and moonshine.”
Brown writes in his 2011 memoir, “Beating the Odds,” that his mother — who was in and out of the picture throughout his upbringing — became a staunch advocate for the quality of her son’s education.
“My mother deals with my education situation in a way that’s so out of character it literally startles me,” he writes. “Basically, she accompanies me to school and very forcefully and indignantly informs my principal that I will not be taking industrial arts classes.”
With a focus on academics instilled, Brown graduated high school at 16 and found his way to Howard University in Washington, D.C.
“It’s the only college I applied to because that’s the only college I had ever heard of,” he said.
As luck would have it, Brown’s tuition, room and board were paid for by a mysterious philanthropist.
“A community organizer in Allentown told us there’s a white lady who would like to help a Black student go to college,” Brown said. “Well, there were only seven Blacks in my class, only three were in college prep, and of those three, two were from middle-class families that could afford to pay for college.”
Looking back on it, Brown criticizes himself for not making the effort to track down and thank the woman who paid for his college education.
“Every year I was at Howard, this lady would send a check to the registrar,” he said. “I didn’t have enough sense to look this lady up, and by the time I did have enough sense, I couldn’t find her.”
After earning a degree in electrical engineering, Brown went on to get a master’s degree at New York University, and a master’s in business administration from Indiana University.
In a slow but steady migration away from engineering work at IBM toward finance and investment management, which also included a stint in the Army, Brown set his mind on working for T. Rowe Price Associates in Baltimore, which he described as the best growth stock investing company in the country.
Brown’s transition from a comfortable and promising job at IBM to the world of wealth management could be traced in some ways to the entrepreneurial spirit instilled in him by the uncle who made a decent living running moonshine.
“The reason I am attracted to money management business is it’s measurable,” he said. “We mark to market every night. You’re either good at it or you’re not. That’s the kind of business I want to be in.”
Appreciating that he had benefited from some of the earliest forms of affirmative action, Brown’s applications to T. Rowe in 1971 were deliberately void of any reference to his race.
“I was the first African American professional hired at T. Rowe, and I give them a lot of credit for hiring me,” he said. “There was no emphasis on affirmative action, and they only had one Black client at that time.”
The move to T. Rowe also facilitated the opportunity to become a regular guest on “Wall Street Week with Louis Rukeyser,” a popular public television program filmed on Friday evenings in nearby Owings Mills, Maryland.
When Brown launched his own firm after 10 years at T. Rowe, his very first client tracked him down by going through the PBS offices in Owings Mills.
That client was Geraldine Whittington, the former personal executive secretary to President Lyndon Johnson.
“I was a panelist on ‘Wall Street Week,’ and she wrote a letter to the program saying she wanted to get in touch with me,” Brown said. “She had won a medical malpractice suit and had won some money. It was just circumstance, fate and being in the right place at the right time.”
Brown said his first big corporate client was Dow Chemical Co., which eventually led to getting a slice of the giant pension fund California Public Employees’ Retirement System.
“It was a bootstrapping approach,” Brown said. “Before approaching major institutions, I wanted to have some clients that I managed money for.”
He describes getting Calpers as a client as “an interesting situation.”
“As I understand it, they were challenged to have some diversity, and they didn’t want to be backed into a corner of looking for strictly women and minority-owned firms,” he said. “So they asked for emerging investment management firms, and we got invited to make a presentation to the investment committee. As I recall, the allocation was $40 million, which was huge at the time.”
Of course, it wasn’t just a steady ride up from there to the present day where Brown Capital Management manages $17.5 billion and employs 38 people.
One example of Brown’s leadership style and commitment to others stood out in the midst of the 2008 financial crisis.
After reaching a peak of $6 billion under management in 2005, Brown said the growth strategies lagged the markets leading up to the financial crisis. And when 2008 saw the S&P 500 Index decline by 37%, the company’s assets had fallen to $1.1 billion.
It was at that point when Brown got a call from a consultant representing one of his bigger institutional clients, asking how low the assets under management would have to get before Brown Capital Management would be forced to shut down.
Brown said he took offense to the question.
“I was so upset and wondered if he was calling any white-owned firms and asking the same question,” he said.
But as with many of the other challenges Brown had faced up to that point, he found something of value in the question and actually sought to come up with an answer.
“I told him the number was $150 million,” Brown said.
As the Great Recession unfolded and layoffs swept across Wall Street, Brown and his team devised a plan to weather the storm without laying anyone off or cutting anyone’s pay or benefits.
Well, almost nobody’s pay was cut.
“The three most highly compensated people agreed to take significant pay cuts,” said Brown, referring to himself, current president Keith Lee, and Bob Hall, the former president and chief operating officer, who died in October 2019.
“We also had a very generous landlord, who agreed to stop charging rent,” said Brown, who owned the building.
Lee recalls that uncertain period in early 2009 as a classic Eddie Brown experience.
“We had confidence that at some point, and we didn’t know when, that the markets would come back and we’d be fine,” Lee said.
“But that strategy to get us through it was so consistent with Eddie and his leadership style,” he added. “He is holistic in his thinking, and one of the smartest people you’ll ever meet.”
As of January, Brown transitioned from chief executive to executive chairman of the firm he launched in 1983 out of his home.
Lee, who joined the firm in 1991, has served as president since 2012 and worked closely with Brown on the portfolio management side, is now CEO.
It is, as Brown explains, part of the succession planning process, but not the start of his retirement.
“This signals to the world that we have a succession plan,” Brown said. “This is the first step, but I have no current retirement plans. I’m having fun and I’m in great health.”
As Brown’s business has grown so has his appreciation for being able to “pay it forward.”
Eddie Brown and his wife Sylvia have donated tens of millions of dollars over the years to programs that support education and the arts, especially those that promote expanding educational opportunities to African-American communities.
In addition to founding The Turning the Corner Achievement Program, the Browns have donated to the Baltimore Museum of Art, the Enoch Pratt Library in Baltimore and the University of Maryland Baltimore Cure Scholars Program, and they founded the Eddie C. and Sylvia C. Brown Fellowship in Community Health that provides tuition to students at Johns Hopkins Bloomberg School of Public Health.
In October, the Browns donated $5 million to their alma mater Howard University, which turned out to be the largest gift the university had ever received.
Brown said two people in his life have influenced his philanthropy: the woman he calls Lady B, who anonymously paid his tuition at Howard, and a pastor who once told him, “Those who are blessed should be a blessing to others, especially those who are less fortunate.”
John Rogers, founder, chairman and co-CEO of Ariel Investments, has been friends with Eddie Brown for 35 years, and regards him as “an important role model for young African Americans considering a career in the money management industry.”
“With every success, Eddie gives back to his community,” Rogers said. “He is unwavering in his commitment to Baltimore.”
Ariel Investments, which was founded six months before Brown Capital Management in 1983, represent the two oldest African American-owned asset management firms in the country.
Reflecting on how far he’s come from a segregated small town in the Jim Crow South to become successful enough to be able to give millions of dollars to charity, Brown remains humble.
“I’m just kind of a regular guy,” he said. “I’m not trying to be a trailblazer; I just consider myself extraordinarily fortunate to be able to develop an excellent investment management firm and be able to bring together this talent. I’m not selfish. That’s always been my approach, and to be a good citizen to the community.”
jbenjamin@investmentnews.com