In a recent interview with Barron’s, Brown Capital Management founder Eddie Brown discusses his unconventional career path as well as his firm’s investment philosophy and opinions on women and minorities in the industry.

Here are some highlights from Brown’s comments:

• “It’s really strange to me that, with our investment philosophy and our performance track record, while competing with the best and the brightest, we’re only at $14 billion [AUM]. Why we don’t manage $50 billion I don’t know, but I can only think of one reason.”
• On race and gender as barriers in the investment industry, Brown said, “People tend to hire people like themselves. When you look at the makeup of key investment decision makers on Wall Street, very few are African-Americans.” He credits T. Rowe Price for making a “bold move” when they hired him in 1973.
• According to Brown, “firms need to make a bigger effort to be diverse. People used to say, ‘I can’t find Black people with credentials and experience.’ Well, you have to have a commitment to seek out those people.”
• Brown recalls coining the term GARP—Growth at a Reasonable Price—noting that T. Rowe Price’s founder was credited with first using the term “growth investing.” To Brown, “growth” means “a minimum of high-single digit revenue growth, and a low-double digit or higher earnings growth.”
• Regarding his investment philosophy, Brown says his firm’s portfolios continue to be concentrated: “We’ve always invested in exceptional growth companies.” He noted that “as time went by, we saw an opportunity to focus on small and midsize companies” which he defines by revenue rather than by market capitalization.
• Brown’s firm finds investment opportunities by conducting independent research in a team-based approach. He explained, “I said from day one it’s too risky to have a star portfolio management system,” adding that the firm has custom sectors and they “kind of divvy up and rotate responsibility. This way, every team member on a portfolio is familiar with the total portfolio.”
• Regarding his legacy, Brown said that he “created an exceptional investment firm that is well-diversified racially, at all levels, and always treated employees fairly.”