CHICAGO -- For Gary P. Brinson, it has been a story of rags to riches. And now he'll have a lot more time to spend his riches, although nobody expects the driven Mr. Brinson to just kick back and relax.
The son of a bus driver, the 56-year-old Mr. Brinson built Brinson Partners Inc., Chicago, into one of the world's leading money managers, running $159 billion in institutional assets and $124 billion in mutual fund assets.
His personal wealth is estimated at more than $500 million, built by spinning Brinson Partners out of First National Bank of Chicago in 1989 for $115 million only to resell it five years later to Swiss Bank Corp. for $750 million.
Now, Mr. Brinson's name has been taken off the door of the global manager for its non-U.S. business.
Nevertheless, Mr. Brinson's announced retirement will leave the institutional investment industry without one of its giants.
"He's one of the most respected figures in the industry, there's no question about it," said Ron Jones, principal with Hewitt Investment Group, Lincolnshire, Ill.
In his 30 years in the business, Mr. Brinson built a reputation as one of its savviest investors, and one whose influence extended far beyond his own firm.
Bridging the gap between
academia and investment practice, Mr. Brinson's most important contribution was to focus on the importance of asset allocation -- and on a global scale, when most U.S. pension funds were focused almost entirely on domestic investments.
A critical 1986 paper he co-authored with L. Randolph Hood and Gilbert L. Beebower, stated the strategic benchmark allocation explains on average 93.6% of the variation in total plan return.
"I think that whenever we do an asset allocation study, we think of Gary Brinson and his lead in this area," said Steve Nesbitt, senior vice president at Wilshire Associates, Santa Monica, Calif.
Some observers believe that following his seminal work in investment theory, Mr. Brinson's major contribution has been to build Brinson Partners into one of the world's largest money managers.
"He's just a great manager of businesses and of people," said a former Brinson employees, who asked to be unnamed.
Mr. Brinson also has been generous with his time and money, financing a fellowship program at Washington State University, where he obtained his M.B.A., as well as other charitable activities.
"He's taught my class," said Nobel laureate William F. Sharpe, former finance professor at Stanford University who now is chairman of Financial Engines Inc., Palo Alto, Calif.
"He was awesome. The students just absolutely went ga-ga over him. Fantastic presentation, fantastic material. He's really just an exceptional guy," Mr. Sharpe said.
Yet Mr. Brinson remains a complex personality. While lionized in the investment industry, former Brinson employees also recall how difficult working at his shop was on their private lives.
Former employees remember the 11 p.m. phone calls on work matters while they were at home in bed, the frequent 8 a.m. meetings on Saturday, the constant demands that swallowed up their personal time. Still, they remain intensely loyal, long after their departures from the firm.
Ed Hamill, Mr. Brinson's marketing chief until he retired four years ago for health reasons, remembers one time leaving the office as the morning newspapers were being delivered.
"I can remember his cigar smoke on Sunday morning wafting up to my office. It was a smell of familiarity, a smell of a corporate home," he said.
A lot of the loyalty is due to Mr. Brinson's sense of compassion.
Mr. Hamill remembers in 1994 he had collapsed prior to giving a presentation -- "which we won" -- in Kansas City, Mo.
Mr. Brinson took a look at the gravely ill Mr. Hamill in the hospital, then chartered a jet to bring the ailing marketer's wife, Cathy Hamill, to the hospital before Mr. Hamill entered surgery.
"I will never forget that as long as I live," Mr. Hamill said.
Another time, the mother of a woman who worked for Mr. Hamill had died in tragic circumstances.
She returned to work on the day bonus checks were handed out. Mr. Brinson was stopping in each division, usually making remarks as he handed out the good news. "One thing I won't forget is the day he walked in, he just put his arms around (her), and they just wept, just wept," he recalled.
Mr. Brinson, he said, is "an intense man, but with great compassion."
While a student at Seattle University in the early 1960s, in a fateful move, Mr. Brinson switched his major to finance from accounting.
But the key stroke of luck occurred when Mr. Brinson was pursuing a Ph.D. at Stanford University. While Mr. Brinson had an academic career in mind, Stanford faculty suggested he work in industry for a while.
Mr. Brinson chose Travelers Insurance Co. in Hartford, Conn., because noted Harvard Professor Eli Shapiro was there at the time.
He joined Travelers as an analyst, and never resumed his doctoral studies. He became president of Travelers Investment Management Co. at the tender age of 36.
He brought the now widely accepted notions of asset allocation and modern portfolio theory to TIMCO in the 1970s.
A rising star in the industry, he jumped to First National Bank of Chicago in 1979 to build its budding money management operation.
Ten years later, as the bank was being forced to tighten its belt, Mr. Brinson bought out the unit, then known as First Chicago Investment Advisors, which had $12 billion under management.
Mr. Brinson renamed the unit, putting his own name above the door. The rest is history.