The founder and CEO of Brown Capital Management has a simple approach: Find businesses that “save time, money, headaches and lives”—then figure out whether management has the skills necessary to grow them. This according to an article in Forbes.
“If these criteria are met,” the article explains, Brown’s firm will “load up on the stock and wait.” The firm subscribes to what the article describes as an “old-school stock-picking operation that doesn’t chase the latest fads on Wall Street,” but rather “hunts for unglamorous but fast-growing companies,” most of which have revenues of less than $250 million.
So far this year, the article reports, Brown’s flagship Small Company Fund is up 21%, “trouncing the market, and has averaged a 19% return annually over the past decade. Since its inception in 1992, the fund is up 22-fold.”
The 78-year-old Brown, who came from humble beginnings in Apopka, Florida, found inspiration in an entrepreneurial uncle who ran a fleet of trucks that transported citrus laborers and moonshine—and who “showed him that it was possible to earn money without a boss. Brown attended Howard University in Washington D.C., where he graduated with a degree in engineering in 1961. While working for Martin Marietta and then IBM, however, Brown discovered a love for investing and enrolled in Indiana University’s business school. In 1973, Brown became the first African American portfolio manager at T. Rowe Price. He started his own firm in 1983 and, by Forbes’ estimate, is now a centimillionaire. Over the past twenty-five years, he and his wife have distributed over $39 million to various philanthropic organizations with a focus on the Baltimore area.
“It’s incumbent upon those of us who are of color in the investing field,” says Brown, “to do everything we can to spread the world that this is an area of tremendous opportunity to create wealth. It’s not just about wealth, but to be in a position to then do some good for others.”