As businesses became more international and markets around the world grew increasingly interconnected over the last three decades, a forward-thinking investor could succeed with a global portfolio. Gary Brinson was one of the earliest of those investors.
He recognized in the 1970s that the markets outside the United States were not, as conventional wisdom dictated, excessively risky. In the right balance, he reasoned, they could actually lead to greater diversification and solid returns.
Brinson ’68 received the University’s highest honor last fall, the Regents’ Distinguished Alumnus Award, because of his achievements in institutional investing and his pioneering approach to global markets.
That investment acumen—worth an investment portfolio of over a trillion dollars, with a “t,” in the late 1990s—earned Brinson the highest honor of the Chartered Financial Analysts Institute, an award given to such notables as Warren Buffett, and a lifetime Horatio Alger Association membership in 2008.
Like the classic Alger story, Brinson didn’t begin life around huge amounts of money. He grew up in Renton in modest circumstances. His father, a Seattle bus driver, and his mother, a Sears store clerk, encouraged education even though they had no financial means, says Brinson.
He enrolled at Seattle University as an undergraduate, but couldn’t afford room and board so he commuted daily and worked before and after classes. Brinson paid for college through his job at Oberto Sausage on Rainier Avenue.
“I was in charge of cleaning the grease pits, which would encourage anyone to get an education,” says Brinson with a laugh. He also washed the Oberto trucks, smoked pepperoni and sausage, and vacuumed mold off the salami.
His day job was a world away from finance, his major at Seattle U. and eventually his concentration for his MBA at Washington State. WSU gave Brinson a teaching assistantship, enabling him to attend and complete his graduate work in finance.
At WSU, Brinson began developing his philosophies on investment, primarily the application of mathematical models to investing and an interest in global markets. “I was certainly involved in the incipient stages of quantitative analysis applied to investment management,” says Brinson. “People forget that prior to the 1970s most of investing was very qualitative, soft analysis.”
Under the direction of finance professor Omer Carey, Brinson distinguished himself with his interest in quantitative rigor. The MBA degree led to 12 years in an insurance company on the East Coast, followed by an offer to run a large Chicago bank’s investment office, which excited him because the bank had offices in London. “It gave me a chance to leapfrog into global investing,” says Brinson.
In 1989, Brinson established his own investment firm, Brinson Partners Inc., a major asset management firm that represented some of the nation’s largest institutions and with offices in Chicago, London, and Tokyo. His success at money management drew acclaim, but primarily Brinson is credited with developing international investing as a viable strategy.
He, along with two co-authors, also published findings in 1986 that showed large pension funds performed just as well or better with simple asset allocation—choosing various, diverse classes for investment—than professional pension managers making active choices.
Brinson shared some of his knowledge after receiving the Regents’ Alumnus award last fall, delivering the eponymous Brinson Distinguished Lecture in Finance. At the lecture, Brinson laid out the unpredictability of assets over time and warned of following the crowd. “Don’t assume that what might make an attractive investment today will be an attractive investment tomorrow,” he says.
Brinson left the industry in 2001 after 30 years in the money management business to concentrate on his private investment firm and the Brinson Foundation. The foundation, managed by Brinson, his wife, and two daughters and their husbands, awards grants for education, health care, and scientific research.
“We’ve made grants that have helped young people who had demonstrated success in the classroom,” but didn’t have funding to continue, says Brinson. “To provide funding for those people has been very rewarding, because we knew if we weren’t there, there was no way for them to go forward.”
Brinson’s contributions have also helped WSU’s education mission. In addition to the finance lecture, Brinson’s endowed professorship in finance led to the Cougar Investment Fund and its trading room for students.