Throughout the pandemic and the market volatility over the past year, Baird’s Private Wealth Management (PWM) team stayed focused on responding to the needs of our clients. Our clients needed advice and support more than ever during this difficult year, and thanks to Baird’s extraordinary people and our enduring culture, we were able to meet that challenge head-on.

Within days of lockdowns being extended all over the country, more than 2,500 PWM associates shifted to working from home. But one thing did not change: Our Financial Advisors made sure they were available and receptive to our clients’ needs. This focus on service is just one way we help prove our value and build trust with our clients.

Strategas, a Baird Company

A critical resource for PWM and an important recent addition to the Baird family is Strategas, a macroeconomic forecasting firm that has long been a trusted expert on Wall Street. Strategas provides market strategy and perspective tailored to help our clients better understand what is happening in the world today and how it can impact portfolios and plans in the future. Their premier market, macroeconomic, and government policy insights complement the planning and investment strategy work that we offer to you as our wealth management clients.

Our Heritage: Enduring Culture

Baird has long prided itself on a firmwide culture that has landed us on Fortune 100 Best Places to Work For^® list the past 18 years. Our expertise, teamwork and client-centered approach have always helped us weather storms like the ones we saw in 2020. In a year of turmoil, our long-term vision and conservative approach served our clients’ financial situation well.

Despite the social distancing landscape, our Financial Advisors went to great lengths to stay in regular communication with our clients. Whether that was through virtual meetings or creating a safe environment with small teams working out of thoroughly disinfected offices, our clients always had a safe and open channel to connect.

Many of our Financial Advisors went above and beyond for our clients in this unusual environment. This included such things as sending groceries and care packages to our elderly clients who weren't able to leave their houses. One branch even hosted a drive-thru food truck for their clients and put together care packages for essential workers. These events were in keeping with Baird’s heritage and culture, which entails doing everything we can for the long-term security of our clients’ futures.

In addition to the pandemic, America also faced civil unrest over the course of the year, which weighed heavily on all of us. Confronting the persistence of racism, inequality and injustice, we at Baird continued to prioritize fostering an environment where every individual truly matters. We pride ourselves on being present – to lean on, to be patient with, and to stay positive for one another. Baird is critically focused on listening to and addressing the concerns of our associates of color as well as the particular needs of our clients who are members of minority communities.

Thank you to all of our clients for our partnership and your continued trust.

Baird Advisors

Baird Advisors, our fixed income asset management business, delivered another strong year across its suite of products in 2020. In a year that was filled with challenges, our risk controlled, all-weather approach to investing, which has helped guide our clients through every major market event over the past 20 years, continued to serve them well. As always, we took the long view, focusing on competitive, long-term performance that supports our clients’ investment goals. We believe that investors own bonds, especially in a low rate environment, to dampen volatility and normalize overall portfolio returns, not to create excitement. That approach was especially important in a tumultuous 2020. Three of our funds – the Aggregate Bond Fund, Short-Term Bond Fund and Ultra Short Bond Fund – earned prestigious Gold ratings from Morningstar. The team’s consistent focus on long term competitive performance and strong client relationships resulted in a record year of growth for Baird Advisors, which had more than $112 billion in assets under management at the end of 2020. Baird Advisors’ approach to fixed income investing is nationally recognized, with the team members’ expertise frequently being cited in both industry and national media, including Barron's and The Wall Street Journal.

Experienced Team

Our team consists of 66 highly experienced professionals, including a group of senior portfolio managers who have invested together for more than 35 years. Several of these managers formed the original Baird Advisors team, which celebrated its 20th anniversary in 2020, as did three of our funds: Core Plus, Aggregate Bond and Intermediate Bond. Mary Ellen Stanek, Chief Investment Officer of Baird Advisors, was nominated for the 2020 Morningstar Outstanding Portfolio Manager Award and was named one of Barron’s 100 Most Influential Women in U.S. Finance. We are grateful for the longevity of our core group and remain focused on keeping our clients’ interests foremost and investing in our team as our business continues to grow.

We continue to support the growth of our business and deepen our capabilities for our clients by developing the next generation of leaders, including adding several new team members in 2020. The continuity of our team reinforces the building of our long-term client relationships, many of which go multiple decades and have an average of 12 years overall. Sadly, we lost a founding member of Baird Advisors with the passing of Gary Elfe, our Research Director Emeritus. Gary’s presence will be missed, but his wisdom, dedication and impact on all of us will live on.

Municipal Funds

Marking their fifth anniversary in 2020, our municipal fund strategies have already become leaders among their peer groups. Total assets in our municipal products reached $6 billion at year-end. Our Short-Term Municipal Bond Fund was named 2021 Refinitiv Lipper best short municipal debt fund, the second year in a row it received this honor.

Baird Equity Asset Management

Our Equity Asset Management teams manage strategies and mutual funds for individual and institutional investors. Each of the business' four teams is staffed with experienced investors possessing a deep expertise in targeted areas of the equity markets. All share the objective of delivering strong performance and exceptional service to our clients. Our time-tested investment philosophies and processes, with their focus on consistency and purity of style, aim to deliver high-conviction active management. Our assets under management have increased over 250% during the past five years.

Team Highlights

The Specialized Asset Management (SAM) team, which manages customized portfolios for high-net-worth clients on behalf of Baird Financial Advisors, had a terrific 2020 and has seen assets under management triple over the past three years reaching $2.6 billion in 2020. Our Growth team's MidCap Fund continues to have strong long-term performance and celebrated its 20th year in 2020; the fund was recognized as one of Morningstar’s “Thrilling 36” out of 8,000 funds. The team’s newest offering, the Small/Mid Cap Growth Fund, will reach three years in 2021 and has achieved strong peer relative performance and consistent asset growth resulting in placement on a prominent third-party recommended list.

Chautauqua Capital Management, our international and global team, notched strong peer-relative performance in 2020, which led to another year of consistent growth in assets. Chautauqua’s funds will achieve their five-year milestone in April 2021. In a year with continued headwinds for value investing, our Value team maintained strong client retention.

Throughout the challenges of 2020, we remained focused on our decades-long priority: our clients. What we are most proud of at the end of this year is that our teams delivered strong, competitive results over this challenging period, providing stability and peace of mind for our clients.

We also leveraged a full suite of virtual touchpoints to support our clients when in-person meetings were not possible. In addition to arranging online meetings, conference calls and webinars, we executed several virtual conferences. These sector-oriented events provided our clients with continued access to Baird’s experts and industry relationships, including virtual 1-1 meetings with company leaders and institutional investors.

These efforts culminated in our strong performance during a very challenging year. We completed 189 advisory and financing deals, including increases in buy-side M&A and equity financing transactions, and logged a record backlog of client engagements heading into 2021.

Expertise for All Markets

Our team of more than 400 bankers and support professionals collaborates across geographies and areas of expertise to serve our clients. Despite 2020’s market dislocation and challenging conditions, we enhanced and deepened our sector coverage in our industries, geographies and product areas of focus. For example, we enhanced our global healthcare platform by welcoming senior bankers in North America and Europe. Additionally, we appointed two co-heads of North American M&A to lead the expansion of our capabilities in the geography.

These strategic additions complement our existing platform, which includes five core industry groups that cover dozens of subverticals. We will continue to invest in the talent, technology, resources and systems needed to support the growth of our business and further enhance the execution we deliver to our clients.

2020 Results

Throughout 2020, we focused on supporting our portfolio companies and the prudent deployment of capital. We deployed $158 million in 11 new investments and made 13 follow-on investments totaling $24 million. Additionally, we generated $113 million in realizations, primarily from the exit of four investments.

Global Private Equity

With a focus on the global technology services and industrial solutions sectors, our Global Private Equity platform invests in lower middle-market companies across the U.S., U.K. and Asia. This unique approach affords us flexibility in where we deploy capital and enables us to provide investors with global diversification. The team completed four new investments and one add-on acquisition during 2020, deploying $125 million. Several of our portfolio companies posted strong growth through the pandemic and we positioned two for exit. In early 2021, we exited Prescient Healthcare Group and Collingwood Lighting, Ltd., generating over $100 million and over $60 million in proceeds, respectively. To date, we’ve exited three investments and returned over 75% of paid-in capital to investors in Baird Capital Global Fund I.

U.S. Venture Capital

Our Venture Capital platform invests in mid-stage companies in the U.S. healthcare and technology & services sectors. We focus on companies in underserved geographies, with a particular interest in the mid-country. In 2020, we completed fund raising for Baird Venture Partners V with a total of $215 million in committed capital, exceeding our target and the size of our previous venture capital funds. We deployed $57 million in seven new and 10 follow-on investments - our largest-ever annual deployment.