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Home > Asset Management Thinkers > Gary Brinson

Asset Management Thinkers

Gary Brinson

One of the world’s most influential investment managers

Timeline

1966
Received BA in finance from Seattle University.
1969
Received MBA from Washington State University.
1969
Appointed an analyst at Travelers Insurance Co.
1979
Appointed chief investment officer for the First National Bank of Chicago.
1989
Cofounded Brinson Partners.
1991
Named Outstanding Financial Executive by the Financial Management Association.
1994
Sold Brinson Partners to Swiss Bank Corp.
1994
Cofounded GP Brinson Investments.
1999
Received the Award for Professional Excellence from the Association for Investment Management Research.
2000
Cofounded the Brinson Foundation.

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Life and Career

Gary Brinson is a global investment expert, writer, and founder and retired chair of Brinson Partners, and private investment firm, GP Brinson Investments. He started his career at Travelers Insurance and went on to become chief investment officer for the First National Bank of Chicago, where he set up its asset-management unit. He orchestrated a management buyout of the division to create Brinson Partners, Chicago, which he later sold to Swiss Bank Corp. His next step was to launch GP Brinson Investments LLC, which he ran until his retirement in 2000. Since then, he and his family have run the philanthropic Brinson Foundation, which gives grants in education, science, and public health. He is a former executive committee member and past chairman of the Institute of Chartered Financial Analysts, and is a trustee of the Research Foundation of the Institute of Chartered Financial Analysts. He has also lectured and written on professional investment for many years.

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Key Thinking

  • The management buyout of the asset management unit he set up at First National Bank of Chicago, and its subsequent purchase by Swiss Bank Corp and merger with the Union Bank of Switzerland, created one of the world’s largest money managers, in control of the combined banks’ institutional assets.

  • His asset allocation theory is based on four key principles: thinking globally, realizing that the value of asset classes should not rise and fall together, focusing on the long term, and monitoring and adjusting allocations to accommodate changed investment climates.

  • He has promoted the professionalism of investment management by taking an active part in its industry association, the Association of Investment Management and Research (AIMR) and its Research Foundation.

  • The January 2003 issue of CFA Magazine named Brinson as one of seven living legends in the investment profession.

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In Perspective

  • He was one of the first financial gurus to spot the value in investing overseas during his time at Brinson Partners, and was a pioneer of asset allocation techniques.

  • Argued that investment decisions should prioritize markets or asset classes, and that the focus should be on overall portfolio risk rather than the risk of individual assets.

  • Believed that asset allocation should combine different asset classes in ways that increase returns without an equal increase in risk, or that can reduce risk without sacrificing returns.

  • Considered that with an international portfolio, it is possible to get equity-like returns with the low volatility you would expect from a mixture of stocks and bonds.

  • He co-authored a paper in 1986, pointing out that asset allocation, not stock picking, drives portfolio performance, and that differences in stock selection explain very little of the variation in results for investors over the long run.

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Quotation

“Extreme dislocations in markets inevitably occur.”

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Further reading on Gary Brinson

Books:

  • Ibbotson, Roger G., and Gary P. Brinson. Global Investing: The Professional’s Guide to the World Capital Markets. New York: McGraw-Hill, 1993. Examines asset classes, investment theory, and international investing in a practical way.
  • Mintz, Steven L., Dana Dakin, and Thomas Willison. Beyond Wall Street: The Art of Investing. New York: Wiley, 1998. An overview of investing that features eight well-known figures of the investment world, including a profile of Brinson.

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