Two for the Money: Ryan DeVore and John Brennan take William Blair & Company into expansion mode
- June 1, 2017: Vol. 4, Number 6

Two for the Money: Ryan DeVore and John Brennan take William Blair & Company into expansion mode

by Mike Consol

Ryan DeVore references a recent study showing the United States, and the world at large, has never been wealthier, and that investment in every asset class is growing. Total dollars invested has grown in each of the major economic strata — the $1 million to $5 million cohort, the $5 million to $25 million cohort, and those whose assets total more than $25 million.

“They are all at record levels,” he says. “The world has become ultimately wealthy and certainly rebounded from the financial crisis.”

Among the beneficiaries of that surge in domestic and global wealth has been the private wealth division at William Blair, where assets under management have expanded by $10 billion during the past four years. That is especially good news for DeVore and John Brennan, who jointly manage the division. Officially, DeVore is head of private client advisers, and Brennan is head of investment counseling.

The duo sees opportunity and has their firm on the move in anticipation of playing a role in expanding, preserving and managing that wealth. They have expanded their team of experienced advisers, wealth planners, client service associates and other professionals, and broadened the Chicago-based organization’s footprint with a new office in Atlanta, and they began offering the private wealth business from the firm’s existing offices in Boston and New York. Its growth plans also call for additional offices in Los Angeles and San Francisco, and eventually in Dallas, Denver and other potential centers of wealth generation.

A good deal of the private wealth unit’s growing roster of clients and AUM is thanks in large part to William Blair’s global investment banking practice focused on the mid-market space, which it defines as companies valued at $100 million to $2 billion. Since 2012, the investment banking practice at the firm has assisted in completing transactions valued at $250 billion involving more than 750 client companies in 35 countries. During that same 2012–2016 timeframe, it has negotiated mergers and acquisitions worth more than $120 billion. Flush with a liquidity-event windfall, those investment-banking clients can stay under the William Blair roof for financial planning and investment advice from the private wealth team spearheaded by Brennan and DeVore.

The investment bank’s role in the company’s overall success is consistent with the founder’s original intent. William Blair planted its flag in 1935 as the United States was emerging from the Great Depression and the city of Chicago was transforming itself into one of the world’s great industrial-age cities. The firm was founded to capitalize the city’s business owners and help them manage and grow their enterprises.


William McCormick Blair founded his namesake company along with Francis Bonner, though it was called Blair, Bonner & Co. during its first incarnation. The two men were colleagues at investment firm Lee, Higginson & Co. until it went bust in the early 1930s, and they decided to go into business together, intent on raising capital for growth-oriented companies, particularly those located in the Midwest. Bonner departed the company in 1941, and the title was changed to its current moniker.

In 1946, Blair’s sons, William McCormick Blair Jr., Edward McCormick Blair and Bowen Blair, joined the firm. The founder stepped down as managing partner in 1961, and handed the reins over to son Edward, though the founder remained a senior partner at the firm until his death in 1982 at age 97.

Among William Blair’s claims to financial fame is that it helped fuel the growth of the Household Finance Corp., and Continental Casualty and Continental Assurance (today CNA Insurance).

From its relatively humble beginnings in the Windy City, the firm has expanded to 15 offices, including global gateways such as Frankfurt, London, Sydney and Zurich. It also maintains a presence in Asia, by virtue of an ownership stake in BDA Partners, which has offices in Shanghai, Hong Kong, Mumbai, Ho Chi Minh City, Seoul and Tokyo.


In addition to spinoff business from the investment banking, growth also has been fueled by an expanded product platform, new technologies that appeal to both ultra-high-net-worth and younger generations of wealth, and referrals from its existing clients — whether family members, business partners or friends within their business or social network.

“Satisfied clients are our best referral source. Their advocacy creates the best introduction possible,” Brennan says.

Brennan cites the private wealth division’s high client-retention rate, and ties that to the firm’s strong retention rate among its advisers.

“We have individuals who have been here for a very long time,” Brennan says, noting that his team’s low turnover rate has created the kind of stability that instills confidence and longevity in client relationships. “Our average adviser has been with us 20 years, has 30 years of industry experience, which definitely helps us in a big way.”

The company’s team of financial advisers is currently a work in progress, as Brennan and DeVore are actively recruiting “first or second quintile teams” from competitors large and small.

Despite the firm’s substantial size, Brennan considers the firm a “global boutique.”

“We look and act small but, in reality, we’re an international company with a presence and access to capabilities that you would expect from a company much larger than ours,” he explains.

While bringing a new client through the orientation and initial asset allocation process, the private wealth division brings numbers to the table — an adviser, a wealth planner and a person from the consulting services team.

“They talk about what makes the most sense for that client, given that client’s situation,” Brennan says. “It results in a highly customized solution, something very different than what many of our competitors offer. We believe our approach and high degree of experience brings a lot of additional value to our clients.”


Customization is a word Brennan and DeVore refer to often.

“We customize portfolios for clients,” Brennan flatly states, and they do so with the assistance of the company’s proprietary platform, which gives advisers the ability to invest in funds, offer consulting services, and create and manage separate accounts.

Having said all that, Brennan emphasizes that his team does not work with hundreds of outside managers, instead limiting its cadre of managers to a smaller number that the firm’s investment professionals know “exceptionally well.”

“Oftentimes we’re going back to those same managers across many different portfolios because we like what the managers represent,” he says, suggesting the familiarity facilitates additional customization for client portfolios.

From those and other relationships, the firm has formulated about 40 proprietary investment strategies that can be modified to the client’s situation and time horizon. High-net-worth clients tend to have very long time horizons, Brennan says.

Though real assets and other alternatives are generally part of the mix in client portfolios, there are no target percentages assigned to those categories.

“You have to look at it client by client,” Brennan says. “Obviously, there’s a big difference between a $5 million client and a $50 million client in terms of what kind of purpose or place alternatives have in that portfolio. Our larger clients — $10 million and above — are qualified investors and are typically going to have exposure to alternatives, and some of them would have higher levels of exposure.”

DeVore notes that many of the firm’s clients are already invested in real assets through business ownership. That experience inclines them toward understanding and valuing private equity investing in tangible assets. While the trend toward real asset investing has been evident in the industry, DeVore points out that William Blair is seeing much lower allocations being committed to hedge funds, which have been knocked in recent years for lackluster performance and high fees.

Among business proprietors from ultra-high-net-worth families, there is a trend toward what the firm calls “permanent capital.” In short, permanent capital is when ultra-high-net-worth families take significant investments in operating businesses, supplanting a private equity firm’s shorter time horizon, and allowing the family to invest for the long-term.

“These are families that take a more permanent stance in their business,” DeVore says. “We are seeing families that have an interest in investing in an existing operating business, in hopes to put their tenured skill set to use and perhaps employ the next generation.”


William Blair has seen some of the beneficiaries of the surge in affluence walk through its door. While the nouveau riche is certainly seeking yield and income replacement, it is also seeking help in dealing with a more complex financial picture, and that includes a broader appetite for asset classes, including private equity investing in real assets. More broadly, they want someone to help them dissect their financial assets, DeVore says, as well as bring an emotional understanding to their family governance issues. At the firm, they call it the “choking on the silver spoon phenomenon.” High-net-worth families are asking a lot of questions about how to avoid spoiling their children. That includes deciding on an appropriate distribution schedule for the transfer of assets.

“It isn’t all investment focused,” DeVore says.

Trends observed by the firm indicate wealthy families are tending to start gifting assets to their children during their lifetimes, rather than after their death, giving them an opportunity to actually witness — and, to some extent, control — their children’s enjoyment and proper allocation of the money. That is where a distribution schedule comes into play, helping ensure the family fortune’s longevity, including for generations still to come.

“They are basing the distribution of those assets around principles,” DeVore says. “In other words, they may set up a donor-advised fund or a family foundation that has certain philanthropic considerations and will want that next generation or two generations to be involved in making the decisions for the family’s philanthropic efforts.”

On the other end of the spectrum, there are clients whose fortunes are scheduled to entirely bypass the children in favor of funding education, the arts or other philanthropic causes.


The massive transfer of wealth from older to younger generations constitutes both an opportunity and risk to William Blair and other wealth advisory practices. The good news: Millennials and Generation Z appear to be savers and investors. The bad news: Children often decide not to follow in their parents’ footsteps, including their choice of professional service providers.

“Inheritance is a big part of what is playing out right now. In many cases that next generation is really looking for a different provider than their parents or grandparents,” Brennan acknowledges, while pointing to his advisers’ long tenures with the firm and the stability that brings.

DeVore adds: “We’re seeing these multigenerational high-net-worth families in conjunction with new wealth have a complex capital picture and they are needing advice. If we’ve done a good job or we can get an introduction to them, we will be in a place to earn that trust, when they think about investing that capital.”

All that employee retention has its downside, though; namely, an aging adviser base, which is a problem dogging the entire wealth advisory industry as its recruiting efforts fail to attract the interest of generations Y and Z. This becomes an especially poignant issue when coupled with an aging client base preparing to make an enormous transfer of family assets to younger generations. Will millennials and members of Generation Z find their mom and dad’s gray-haired advisers to their liking? What most wealth advisory firms want is an at-the-ready contingent of fellow millennials and Gen Zers ready to step in and speak their peers’ language, young advisers who better understand the ethos and technology preferences of younger generations.

While the firm might not have the full complement of young professionals ready to surf the tidal wave of gathering wealth transfers, DeVore believes millennials and members of Generation Z will find value in a firm that can demonstrate stability, consistency and a long-term orientation toward wealth generation and preservation.

“We don’t have a lot of folks that have changed firms a bunch of times and caused disruption,” DeVore says.

What’s more, its advisers already have multi-generational relationships that can plausibly stand the test of time.

But it is not just young people the industry is lacking, it is the overall volume of new recruits. DeVore cites a statistic showing that for every eight advisers leaving the industry or retiring, only three are joining the industry. For its part, William Blair is “selectively” recruiting people who could have a 20- to 25-year tenure with the firm, enough working years left for Brennan and DeVore to build a “sustainable team.”

“I don’t know that we’ve figured out the industry problem, but we certainly have done a nice job of protecting ourselves,” says DeVore.

William Blair’s ability to retain its professionals — at a time when entire teams of advisers are jumping ship at many wirehouses and RIAs — has everything to do with the organization’s culture, according to Brennan.

“We value our people,” he says, “whether it’s giving them a seat at the table as we’re making important decisions, or whether it’s making sure that they are recognized and rewarded for the good things they’re doing, or whether it’s the softer side and dealing with them in the context of what they’re going through in terms of their personal lives. We can be flexible and we can be supportive.”

Most important, Brennan says, is the firm lets its advisers do their jobs with a focus on a three- to five-year timeframe, rather than the quarter-to-quarter assessments used at larger companies in the space.

“It feels different,” Brennan says.


One of the other factors that might feel increasingly different at William Blair is the existence of its own proprietary funds at a time when many RIAs and private wealth divisions boast about using strictly third-party funds and other investment products. The point is to create a situation where clients, and advisers, feel no conflict of interest between what is right for the client and what is most remunerative for the adviser.

Brennan pushes back on the suggestion, stressing that his team of advisers are agnostic with regard to the assets they select, in part because they have no greater incentive to use a William Blair fund than a third-party fund. Indeed, the company has a team of research analysts dedicated to finding best-of-breed outside managers. It also has access to an internal equity research division, as well as additional external research, providing advisers access to a large number of growth-oriented equities, with an eye toward finding companies that are either disrupting their industry or have a sustainable long-term growth model.

“We have clients who have no William Blair funds in their portfolios, for whatever reason, and we have some that would have a decent amount of exposure to them,” Brennan says. “Obviously, some in the industry have moved to offering only outside funds. We think we can do both; we think we can be objective and agnostic. But we also see benefit in what we have within our own four walls. To the extent our own products are top performers, we think there is some advantage to placing a client within one of those funds. It’s a philosophy, but it’s a philosophy that has worked well for us over the years.”

The quality of the firm’s product offerings is “incredibly important” to the future of the organization, according to DeVore, as is growing the private wealth team and getting more feet on the streets.

“Moving to a full open architecture platform allowed us the opportunity to recruit and work with some of the most sophisticated advisers in the industry,” he adds.

“Growth is clearly part of where we are and what we’re focused on,” says Brennan. “We’ve continued to build out our team by adding financial advisers, wealth planners, client service associates and other professionals who can support the client process.”


Of course, “growth” has taken on a very different meaning today at William Blair & Co. than it did during its early post-Depression years, when the number of U.S. investment firms had been reduced from 600 when the 1929 crash occurred to just 200 when William Blair and his partner hung their first shingle.

Blair set out to build an investment firm that could help Chicago and the Midwest rebuild from the ravages of the Great Depression by providing financing for the region’s most promising growth-oriented companies, as well as restore the public’s confidence in financial institutions.

“When our clients succeed, the firm’s success will follow,” Blair was quoted as saying at the time.

Brennan and DeVore would surely concur that the founder’s formulation has come to fruition.

Mike Consol ( is editor of Real Assets Adviser.

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