OAKS, PA — SEI® (NASDAQ: SEIC) announced that Brown Advisory has launched its first exchange-traded fund (ETF) through the Advisors’ Inner Circle Fund series trust. This strategic collaboration leverages SEI’s established operational infrastructure to debut the Brown Advisory Flexible Equity ETF (NASDAQ: BAFE), a U.S.-focused fundamental active strategy managed by a seasoned team with extensive experience in mutual funds and separately managed accounts (SMAs).
The introduction of the BAFE ETF is a milestone for Brown Advisory as it establishes a foothold in the rapidly growing ETF market, which reached a record $10 trillion in assets in the United States by the end of September. Institutional asset managers like Brown Advisory have been instrumental in the growth of ETFs, often transitioning mature investment strategies from SMAs or mutual funds into ETF structures. The launch of BAFE specifically stems from the tax-efficient conversion of taxable SMAs, providing clients with enhanced investment flexibility.
Chris Bartlett, Head of Brown Advisory’s Institutional Business, emphasized the importance of the partnership with SEI in facilitating the launch. “We chose to partner with SEI through the Advisors’ Inner Circle platform because they offer an established, proven infrastructure, high-touch service, specialist resources, and a knowledge transfer model that supports our long-term plans in ETFs,” said Bartlett. “ETFs afford multi-dimensional benefits to our clients, and we view SMA conversions as a unique tool to accomplish a tax-efficient transition to a tax-efficient vehicle. The conversion required a significant level of care, coordination, and due diligence, and SEI has been a strong strategic partner in this important initiative.”
The BAFE ETF’s introduction is part of a broader movement by institutional asset managers to adopt ETFs for their tax efficiency, cost-effectiveness, and adaptability. By transforming SMAs into ETF structures, firms can maintain the integrity of existing strategies while providing enhanced accessibility and liquidity for investors.
Strategic Partnership Driving Innovation
SEI, a global provider of investment processing and asset management solutions, brings decades of expertise to this endeavor. The Advisors’ Inner Circle Fund series trust was pioneered by SEI over 30 years ago and has grown to manage more than $103 billion in net assets across 45 clients and 121 funds as of September 2024. This platform allows investment managers to expedite the launch of mutual funds, ETFs, and other investment vehicles without the need to build their own fund operating infrastructure.
John Alshefski, Senior Vice President and Head of SEI’s Traditional Investment Managers business, highlighted the significance of this partnership. “We’re excited to welcome Brown Advisory to the Advisors’ Inner Circle Fund Trust and believe the ETF marketplace and ecosystem will celebrate the entry of this unique manager,” said Alshefski. “We’re committed to supporting Brown Advisory’s growth and look forward to building a long-term relationship.”
A Growing Market for ETFs
Brown Advisory’s foray into the ETF landscape underscores the burgeoning popularity of these vehicles among investors seeking diversified, flexible options across asset classes. The conversion of the firm’s SMA strategy into an ETF aligns with market trends prioritizing tax efficiency and scalability, meeting the evolving demands of modern investors.
With SEI’s proven expertise and Brown Advisory’s strong investment track record, the launch of the Brown Advisory Flexible Equity ETF reflects a commitment to innovation and client-centric solutions. This collaboration not only strengthens Brown Advisory’s competitive position but also contributes to the broader evolution of the ETF market.
The introduction of BAFE marks a significant step for both firms, reflecting their shared vision to broaden access to high-caliber investment strategies while meeting the growing demand for efficient and effective investment solutions.
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