Gary P. Brinson
Retired CIO, UBS Global Asset Management, Chicago
Gary Brinson entered the investment management field inauspiciously, as an analyst at Travelers Insurance Co., Hartford, Conn. About 10 years later, he was recruited as chief investment officer in the trust department of First National Bank of Chicago in 1979. First Chicago Advisors, Chicago, became a separate money management company in 1983, and Mr. Brinson and colleagues bought out most of their employer's interest in 1989.
The re-christened Brinson Partners, Chicago, was sold after five years to Swiss Bank Corp., Basel. The $750 million price tag — a whopping eight times earnings — startled the investment industry, and estimates at the time put Mr. Brinson's personal wealth at close to $500 million after the sale. In 1998, SBC Brinson was absorbed into UBS AG, Zurich, when the two Swiss banks merged. When Mr. Brinson retired as CIO at the end of 2000, assets under management at UBS Global Asset Management, Chicago, exceeded $330 billion.
Mr. Brinson is also known for his asset allocation modeling work with Roger Ibbotson, then a professor at the University of Chicago. Their research showed portfolio returns are generated more by asset allocation decisions than by individual security selection decisions.
The boyish-looking Mr. Brinson is frequently described by peers as one of the earliest proponents of global and international investment. He was so early to the game, in fact, that when he arranged a global investment seminar in New York in 1983, only three people attended.
But Mr. Brinson's most enduring legacy probably remains a paper titled "The Determinants of Portfolio Performance," written with Randolph Hood and Gilbert Beebower and published in the July/August 1986 issue of the "Financial Analysts' Journal." The study concluded that more 90% of the variations in fund returns from year to year are attributable to the returns of the underlying asset classes in the portfolio.
His former deputy, Jeffrey J. Diermeier, CIO of UBS Global Asset Management until he retires at the end of the year, said Mr. Brinson was utterly focused on "doing investments the right way. The focus he could bring was just tremendous. He is a pure investor."
"For those of us who are romantic about the business, the Golden Age after the banks and insurance companies were done having their business handed to them, when you had money management companies wrestling the business away on the basis of performance, when investment integrity and the quality of the process was so high, that was when Gary particularly shone," Mr. Diermeier said.