Private Wealth Management
In a year when the markets and the economy presented our clients with many challenges, the people of Baird’s Private Wealth Management business responded with thoughtful advice, guidance and a steady eye toward the future.
As employee-owners of our firm, Baird Financial Advisors keep their focus on the long term and always do what is in the best interests of our clients. Benefiting from Baird’s century of experience in helping investors get through changing and challenging market environments, our Financial Advisors provided confidence and stability in this time of uncertainty.
The year also brought significant enhancements to the ways we serve you.
Among our clients’ top priorities are protecting family wealth and establishing lasting legacies. Baird has consistently invested in these capabilities for years and, as
of September 2022, Baird Trust has made its full suite of services available to all of our clients through your Baird Financial Advisor. This represents a significant expansion of our offerings in the areas of estate planning, trusts, investment management and estate settlement. We also augmented our financial planning talent with the introduction of Baird Family Wealth, a team of experts dedicated to helping our advisors provide specialized advice for wealthy individuals, families and organizations concerned about protecting and preserving their legacies.These sophisticated solutions are designed to help you navigate every financial decision at any life stage, including multigenerational planning for your family.
| $255+ BILLION |
| in assets under management |
Knowing our clients are also looking for expert analysis and interpretation of the economy, financial markets and government policy, our Financial Advisors draw on the resources of Strategas, a Baird company and one of the world’s leading macroeconomic research firms.
Their expertise complements our Wealth Solutions Group, with more than 130 specialists in areas ranging from tax and estate planning to retirement savings, while our Business Owner Solutions team provides focused expertise to help small business owners with everything from valuations to succession plans.
We took several steps in 2022 to further develop our deep roster of diverse advisors. Our NextGen Advisory Council hosted a summit meeting for advisors with three to seven years of service, to help ensure that Baird is equipped to meet the needs of our clients well into the coming generations. Our Baird Women Advisors group continued to nurture talent, hosting a summit of its own and sharing business development resources and mentoring sessions.
We also took steps in 2022 to enhance our services and create greater convenience for you. The new Baird Online app offers a more intuitive design, additional security and improved features for accessing your account and monitoring your complete financial picture anytime and anywhere. At the same time, we invested heavily in technology that allows us to deliver on the plans that will help safeguard your family’s future with even more consistency and efficiency. Our Baird Wealth Strategies webinars continue to provide timely information on the topics most important to you.
"Anyone can make a plan for good times, but we want to ensure our clients are prepared for challenging times and that they know we'll always be here for them when they need us most."
-Mike Schroeder
Mike Schroeder,
Chairman of Private Wealth Management
Erik Dahlberg,
President of Private Wealth Management
In 2022 Baird acquired the Pittsburgh-based Hefren-Tillotson, a Midwestern, client-focused privately held wealth management firm whose culture meshes perfectly with ours. The merger grows our presence in the market significantly and brings the strength and broader capabilities of Baird to more individuals and families in Greater Pittsburgh, while raising the total number of Baird Financial Advisors to more than 1,300.
| 1,300+ |
Financial Advisors |
While our priority and focus is always our clients’ needs, 2022 was a remarkably successful year for our Private Wealth Management business. Our assets under management grew to more than $255 billion. More importantly, it was a year that gave us ample opportunity to continue earning your trust, something we remain committed to every day. Thank you for your confidence in us and in giving
us the opportunity to serve you.
Protecting family wealth and establishing lasting legacies are among our clients’ top priorities, and Baird has consistently invested in these capabilities for years.
Asset Management
Baird’s Asset Management division consists of Baird Advisors, our fixed income asset management business, Baird Equity Asset Management, and Baird Funds, our no-load family of 10 bond and five equity funds.
For the 11th consecutive year, the combined businesses have been named to Pensions & Investments’ list of the Best Places to Work in Money Management. Baird is one of only five companies to have appeared on the list every year since its introduction in 2012. The firm was also nominated for Morningstar’s Exemplary Stewardship award.
While 2022 was a challenging year in both the bond and equity markets, we stuck to what we do best and helped our clients weather the storm. Our portfolio managers have always maintained a long-term focus, understanding that there will be disruptions along the way as we help guide our clients. That is crucial to the success of our offerings in years that prove to be difficult for investors.
BAIRD ADVISORS
Baird Advisors’ suite of actively managed taxable and tax-exempt fixed income products delivered competitive results relative to our benchmarks and peers in 2022.
In challenging times for the bond market, Baird Advisors continued to focus on managing risk, maintaining liquidity and providing the high level of client service we have been known for over the past several decades.
Our team consists of 72 highly experienced professionals with an average of nearly 20 years of experience, including 29 individuals who have earned their Chartered Financial Analyst (CFA) designation. Several of our senior portfolio managers have been with Baird Advisors since its inception in 2000.
We continued to add depth to our professional team over the course of 2022, in our investment, operations, and technology areas. We are proud to have hosted our largest and most diverse group of interns – nine in total. We will continue to intentionally add talent to the team, keeping our clients’ interests foremost as our business continues to grow.
| $120+ BILLION |
in assets under management |
We are proud to note that Mary Ellen Stanek, the President of Baird Funds and Co-Chief Investment Officer of Baird Advisors, received Morningstar’s Outstanding Portfolio Manager Award for 2022. Additionally, for the third consecutive year, the Baird Short-Term Municipal Bond Fund (BTMIX) earned the Refinitiv Lipper Award for outstanding fund performance. The fund was named “Best Fund Over Three and Five Years” in the short municipal debt category.
Our two newest municipal bond funds marked their three-year anniversary in November with strong track records for clients. The municipal bond funds continue to benefit from our strong team of investment professionals, with remarkable cohesion and integration with our broader taxable fixed income team.
"The team's dedication to its clients and consistent performance has been key to their success, and to Baird's success, in all types of markets."
-Mary Ellen Stanek,
President of Baird Funds and Co-Chief Investment Officer of Baird Advisors
| 29 |
Chartered Financial Analysts on the Baird Advisors team |
BAIRD EQUITY ASSET MANAGEMENT
Baird Equity Asset Management continued to deliver unmatched service and strong long-term investment performance relative to our benchmarks and peers for our clients through our actively managed equity portfolios. Even in the difficult investing environment we faced this year, our business proved resilient as net inflows were positive; our assets under management ended the year at $7.9 billion.
- Our U.S. Growth team, which manages small/mid and mid-cap growth strategies and mutual funds, continued its record of competitive long-term performance and longstanding client relationships. In its ongoing commitment to deliver superior results for clients, the group added two new professionals to its investment team.
- Our international and global growth team, Chautauqua Capital Management, continued to deliver strong long-term results, and business growth among both institutional and RIA clients remains positive.
- The Specialized Asset Management team continues to strengthen and expand its offerings to Baird’s Financial Advisors through investments in technology and people.
- The Baird Equity Opportunity Fund appointed Greenhouse Funds LLLP as a sub-advisor at the end of 2021. Relative performance has been solid, and we anticipate increased interest in this fund as the Greenhouse team builds a competitive track record.
Overall, our business remains well positioned given our strong, stable teams, our solid long-term performance, the presence we have built in each of the markets we serve, and the strength of Baird’s brand. In addition, the tumult in the market may enhance the need for active management. We remain focused on being a respected investment firm, a trusted partner to our clients and the best place to work for our associates.
| 11 |
Straight Years on the list of Best Places to Work in Money Management2 |
Fixed Income Capital Markets
Baird’s Fixed Income Capital Markets group is composed of our Sales & Trading and Public Finance teams, including more than 140 institutional sales, trading and analytical professionals working in 25 offices across the U.S. Our institutional clients turn to our Sales & Trading team for fixed income bond investment products, analysis and trade execution while our Public Finance professionals offer underwriting, advisory, consultant and placement agent services to clients in the public, private and nonprofit sectors.
Together they provide deep product expertise and differentiated execution to our clients, working with them through several market cycles and over many years to build deep relationships and deliver a comprehensive range of products.
In 2022, fixed income investors faced challenging conditions, including steeply rising interest rates, high inflation and unprecedented volatility. Our long-term focus and experienced team enabled us to ease the way for our clients, and our Fixed Income Capital Markets business had a solid year.
| 140+ |
Fixed income traders, salespeople and analysts across the country |
SALES & TRADING
In the end, 2022 proved to be a successful year for our Sales & Trading team. We continued to provide value-added insights, exceptional service and quality trading execution for our clients who are buying and selling bonds. The face value of the taxable and tax-exempt bonds we traded reached $255 billion.
With an eye toward developing a stronger infrastructure for our clients, we continued building out our team in 2022, and broadened our trading capabilities in such areas as generalist sales. Our team of professionals now stands at 140, including a newly opened office in Memphis.
The year also saw the growth of structured products, an investment vehicle linked to an underlying asset such as a basket of securities or index, as an important area of trading for us. In 2022, Baird Sales & Trading completed more than 60 SP New Issue mandates, including roles of Structuring Lead, Joint Bookrunner, Co-Manager and Bond Placement Agent.
PUBLIC FINANCE
In the tumultuous bond market environment, municipalities, school districts, charter schools, and state and local government agencies, turned to Baird to refinance existing bond issues and access lower costs of capital to fund new investments in public facilities, a reflection of the team’s commitment to delivering innovative, tailored solutions that resulted in issues from 43 different states. This contributed to Baird’s ranking as the No. 2 municipal underwriter in the U.S. in 2022, based on number of issues.3 We were also ranked among the top five municipal advisors to municipal and government entities around the country, also based on number of issues.
We added 11 new professionals to our team in 2022, bringing our total headcount to 85. We also opened new offices in Philadelphia, Boston and Sarasota, Florida, expanding our ability to serve our clients in those regions.
| No. 2 |
Municipal Underwriter in the U.S.³ |
Equity Capital Markets
GLOBAL INVESTMENT BANKING
Our Global Investment Banking division, which provides advisory and financing services to clients around the world, enjoyed our second-best year ever for revenues in 2022, following only our record-setting 2021.
While both the M&A and financing markets were challenged in 2022, Baird maintained a strong position, successfully advising on a broad range of transactions across our global industry teams. We completed 153 advisory and financing transactions worth a combined $67.8 billion, and our backlog of future deals remains at record levels.
| No. 1 |
"Greatest knowledge of companies and industries" 5 |
INVESTING IN OUR PLATFORM
At the end of 2022, we launched a new GP Solutions team to advise the General Partners of our private equity clients in the secondary market. Leveraging our well-regarded global financial sponsor coverage alongside our independent, industry-driven advisory model, this expansion allows us to offer our private equity clients additional services and expertise in the rapidly growing secondary market.
The investments we have been making in our European team, including doubling the size of our flagship London office, continue to pay off. We formed an alliance with Arcano, a leading M&A advisory firm in Spain and Portugal, to extend our presence in southern Europe. We also expanded our coverage in certain growth sectors in Europe, welcoming senior Healthcare and Technology & Services bankers in London and Frankfurt.
Most importantly, we continued to invest in and expand our services and offerings to clients. Enhancing our already deep group of professionals, we added seasoned, industry-focused Equity Capital Markets bankers to our team. With their deep knowledge of both sector dynamics and the nuances of raising capital in the public equity markets, we were able to guide corporate and financial investors to more favorable outcomes amidst the market volatility. Additionally, our growing Capital Advisory and Restructuring Advisory groups were able to help clients navigate complex financing challenges in the private markets as well.
We also continued to establish ourselves as a global destination for top investment banking professionals, devoting time and resources to keeping our top talent engaged and excited about their work, which ultimately leads to longer tenures with the firm and better outcomes for our clients. With a strong focus on inclusion and diversity, our associates work in a welcoming environment that develops and enhances our global team. It is no surprise that Baird has placed among the Fortune 100 Best Companies to Work For® as well as the Fortune Best Workplaces for Women™.
"We've been able to be more resilient because our teams have been focused on working together to serve our clients' needs, and avoiding all the distractions that more difficult markets bring."
-Jon Langenfeld, Head of Global Equities
GLOBAL EQUITIES
Our Global Equities business spent the year focused on enhancing our research, sales and trading services so we could continue to serve as a trusted, effective equities partner to our clients in an exceptionally volatile year.
We also continued to build meaningful connections between companies and investors in the post-COVID, “new normal” environment, which is so different from our landscape of just two years ago. We arranged more than 20,000 connections for companies and investors during 2022 via our institutional conferences and other investor meetings. We have now doubled our conference company participation over the past several years.
The strength of our client relationships was also bolstered by our continued investment in our talent. Our Sales & Trading team grew to a total of 110 associates in 2022, doing business in 35 countries around the globe. Meanwhile, our Equity Research team, consisting of 90 analysts, covered more than 710 stocks at year-end, and its research is leveraged internally by divisions all across Baird.
Our analysts’ wide range of industry leading research is complemented by insights generated by the team at macroeconomic research firm Strategas, a Baird company, which was recognized in Institutional Investor’s (“II”) annual All-American Research survey for the sixth consecutive year, and is the top macro-only research firm of the firms ranked by II4. Our team once again received high marks in the 2022 Greenwich Associates survey5, our 19th consecutive year of recognition.
| 20,000+ |
Connections between
companies and
investors in 2022 |
|
No. 1 small/mid-cap important research advisory firm
No. 1 best trading for small/ mid-cap equities among all full-service firms
No. 1 small/mid-cap corporate access
No. 1 greatest knowledge of companies and industries
|
Principal Investments
Baird’s Principal Investments group consists of three units with their own investment strategies:
| 1 |
BAIRD CAPITAL
Baird Capital makes direct investments through proprietary funds in emerging and lower middle-market companies. Since 1989, Baird Capital has raised and invested capital in high-potential companies through a series of private equity and venture capital partnerships. Baird is a meaningful investor in the Baird Capital funds, whose other investors include third-party institutions, high-net-worth clients and qualified Baird associates. |
| 2 |
BAIRD PRINCIPAL GROUP
Baird Principal Group makes minority co-investments in middle-market private companies. |
| 3 |
STRATEGIC INVESTMENTS
Strategic Investments makes equity investments in third-party financial services entities that complement Baird’s capabilities and strategic limited partner investments in third-party funds. |
| $4 Billion+ |
raised and managed since inception |
ABOUT BAIRD CAPITAL
Our global platform, focused on business-to-business technology and services investments, allows us to leverage our knowledge, capital and resources on behalf of our clients. As with many financial entities, 2022 presented many challenges, but our long-term focus and dedicated professionals helped us make progress on many fronts during these challenging times.
Altogether, we have 40 investment, operating and support professionals in the United States, United Kingdom, and Asia managing active portfolio companies with combined annual revenues of $1.9 billion and more than 15,000 employees. Since inception, Baird Capital and related legacy entities have raised and managed more than $4 billion and invested in 337 companies.
Although the current economic headwinds have impacted the private markets, we are continuing to see opportunities in end-markets with secular growth. To that end, we have expanded our investment teams in each of our three geographic territories, the U.K., U.S. and Asia. In August 2022, we completed the move of our Asia operations from China to Singapore with the opening of a new office.
We understand the power of elevating diverse perspectives and creating an inclusive environment that enables our team members to deliver strong results. We are particularly proud that Joanna Arras, investment Partner, was named one of the “39 Most Important VCs in the Midwest” and Becca Schlagenhauf, investment Principal, was named a 2022 “Women to Watch” honoree by The Wall Street Journal Pro: Private Equity. Further, Baird Capital is led by Gordon Pan, who was named a Notable Executive of Color in Finance by Crain’s Chicago Business last summer.
| 337 Companies |
invested in since inception |
GLOBAL PRIVATE EQUITY
In July 2021, our Global Private Equity team held the final close of its second global fund (“Global Fund II”). The fund has since completed six portfolio investments and continues to pursue new investment opportunities. The latest investments were in Subsea Technology & Rentals (STR) and UGSI Solutions, Inc., companies in the renewable energy and clean water sectors, reflecting the team’s focus on sustainable industries.
The global platform took advantage of market opportunities, completing two exits during the year. In June, we sold portfolio company Crisp Thinking Group, a business helping corporations protect their brand/image online. Crisp’s revenue rose by 250% during our investment period.
VENTURE CAPITAL
The Venture Capital team successfully finished deploying its fifth fund in September 2022 through its investment in Tellius, a leading decision intelligence platform headquartered in Reston, Virginia.
We supported the growth of our portfolio through numerous add-on investments this year, such as with Flash Parking, Forj, HSP Group, SourceDay and Upfront. In addition to Tellius, the Venture team also made new investments in Quiq, an AI-powered conversational platform that enables brands to engage customer on the most popular messaging channels with bots and human agents, and Zylo, an enterprise leader in SaaS spend management and optimization services.
