Alex. Brown is back in business after 20-year gap, new owner

Raymond James brands its wealth management unit

Alex. Brown is back — in name, at least. The name of the legacy investment banking firm that established Baltimore as an early financial center is returning nearly 20 years after it was stamped out in a series of acquisitions.

Raymond James Financial Inc. finalized its acquisition of Deutsche Bank Wealth Management’s U.S. Private Client Services Unit on Tuesday and announced it would rename the unit Alex. Brown.

Alex. Brown — later and better known as Alex. Brown & Sons — was founded in 1800 by an Irish immigrant and linen merchant and went on to become the nation’s first investment banking firm. The company was acquired by Bankers Trust Corp. for $2.5 billion in 1997. Two years later, Deutsche Bank acquired Bankers Trust and rebranded Alex. Brown under its own name.

Once the pride of Baltimore, Alex. Brown’s acquisition and name change was a gut punch to the city, and news that the company — or at least its name — would return was met with mixed emotions by those who lived the company’s legacy.

“It’s good and bad,” said A.B. “Buzzy” Krongard, Alex. Brown’s CEO at the time the firm was sold to Bankers Trust. “If you see your ex-wife somewhere, sometimes it’s good, sometimes it’s bad.”

The newly minted Alex. Brown will be a division of St. Petersburg, Fla.-based Ray-

mond James’ private client business group, focusing on wealth management for highnet-worth individuals, primarily those with assets of at least $3 million. The division has 16 offices with 600 employees, including100 based in Baltimore. Alex. Brown manages about $50 billion in assets.

“We are particularly proud to be taking on the Alex. Brown brand, originally founded as the nation’s first investment bank more than 200 years ago,” said Haig Ariyan, the unit’s new president, who formerly served as co-head of Deutsche Bank Wealth Management Americas. “There is deep affinity among our advisers, who understand Alex. Brown’s important role in the growth and prosperity of American companies and municipalities, and its reputation for serving the needs of ultra-high-net-worth clients and institutional investors.”

Alex. Brown’s history is inextricably linked to that of Baltimore and the U.S. economy. In its early years, Alex. Brown financed the Baltimore & Ohio Railroad and Baltimore’s first municipal water system. It arranged funding for the Bay Bridge in the 1950s. Later, the firm helped with the initial public offerings of such modern companies as Microsoft and Starbucks.

For nearly 200 years, Baltimore proudly claimed this legacy institution as its own, until the acquisitions by Bankers Trust then Deutsche Bank, which eventually moved much of the work to New York and elsewhere.

The loss came as Baltimore’s stature in the financial world went into decline. Smaller banks that once had headquarters or large outposts in Baltimore were acquired as the industry consolidated, and their operations folded into larger corporate offices. Wachovia Securities moved the headquarters for its equity capital markets division from Baltimore to New York in 2005. That same year, Legg Mason Inc., still based in Baltimore, sold its capital markets business to St. Louis-based Stifel Financial Corp., which retains a presence in the city.

In losing Alex. Brown’s headquarters, Baltimore also lost a corporate leader and community advocate.

“Alex. Brown had multiple partners on every board in town — they were everywhere and they were involved in funding Alex. Brown was once based in this building at Baltimore and Calvert streets. Built for the investment bankers in 1901, the building survived the Great Baltimore Fire in 1904. The building is now a commercial bank. philanthropy everywhere,” recalled Scott A. Wieler, a former Alex. Brown executive.

Philanthropy and community involvement were core principles at Alex. Brown that came from top leadership, he said.

“It’s a big impact when hundreds of people are suddenly not here,” Wieler said.

Deutsche Bank didn’t have the same connection to Baltimore. Over time, many executives left to create new companies that carried on the firm’s legacy.

Wieler and other Alex. Brown veterans in 2002 opened Signal Hill Capital Group. The firm specializes in mergers and acquisitions, primarily in technology and software. The company was named for an area, now known as Federal Hill, where Alexander Brown and other traders raised flags to signal the arrival of ships.

Alex. Brown’s legacy remains in other Baltimore firms as well. Brown Advisory, an independent investment management firm, is a 1998 spinoff; Alex. Brown Realty, established in 1972 to make real estate investments for its clients, went independent in a management buyout in 1991; and ABS Capital Partners, was founded by Don Hebb, the former Alex. Brown president and CEO.

The deal to acquire the U.S. wealth management unit from Deutsche Bank and rebrand it under Alex. Brown is a smart

“The name Alex. Brown has been out of this market for 18 years now. ... What I’m looking to do is reconstitute that as a brand.” Marcus F. Aiello, a regional director for Alex. Brown

move by Raymond James, analysts said.

The financial industry is shifting away from the hands-on investing of brokerages, to advisory services that value advice that yields results for clients, said Stephen C. Winks, who publishes the industry publication Senior Consultant. Raymond James has made a push into financial planning and will strengthen its advisory services by bringing on Alex. Brown, which has a strong reputation in financial advising, he said.

Raymond James was founded in1962 and has been public since 1983. The firm has about $548 billion in assets under management from some 2.8 million clients worldwide.

With less name recognition than its competitors, Raymond James could benefit from attaching itself to a brand with Alex. Brown’s reputation, said Karyl B. Leggio, a finance professor at Loyola University Maryland.

“Raymond James is a growing company, but Alex. Brown is a legacy company,” Leggio said.

Marcus F. Aiello, a regional director for Alex. Brown, overseeing the BaltimoreWashington area, said the firm will pursue an aggressive growth strategy. Aiello declined to talk specifics.

Aiello also wants to restore the firm’s former reputation as a community advocate.

“The name Alex. Brown has been out of this market for 18 years now. ... What I’m looking to do is reconstitute that as a brand,” Aiello said. “We’ve always been involved, but not as Alex. Brown in the community.”

Like anyone reflecting on the new success of an old flame, those who long ago cut ties with Alex. Brown said they wish the company and Raymond James well.

“There will only be one Alex. Brown and it ended, technically, I guess, Sept. 1 of 1997,” Krongard said. “It’s up to them to live up to the name.”