Robert W. Baird & Co. Incorporated

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Robert W. Baird & Co. Incorporated

777 East Wisconsin Avenue
P.O. Box 0672
Milwaukee, Wisconsin 53201-0672

Telephone: (414) 765-3500
Toll Free: (800) RWBAIRD; (800) 792-2473
Fax: (414) 765-3633
Web site:

Private Company
1919 as The First Wisconsin Company
Employees: 2,320
Operating Revenues: $544 million (2003 est.)
NAIC: 523920 Portfolio Management

Robert W. Baird & Co. Incorporated, established and still based in the heart of the Midwest, extended its reach throughout the United States and into Europe while under the wing of giant insurer Northwestern Mutual. Once again operating as an independent company, Baird offers services in wealth management, investment banking, private equity, and asset management.

Firmly Rooted in the Midwest: 191970s

The First Wisconsin Companyforerunner of Robert W. Baird & Co. Incorporatedwas founded in 1919 as the securities arm of the First Wisconsin National Bank. Robert Wilson Baird was named lead partner and then served as president for nearly three decades.

The 1929 stock market crash led to the separation of banks from the security business. Consequently, First Wisconsin Company split off in 1934 as the Securities Company of Milwaukee Incorporated. Five years later, the firm took the name The Wisconsin Company.

In 1943, The Wisconsin Company began publishing its annual "Financial Briefs," which would gain recognition and respect for its quality research. In 1948, the company purchased a seat on the New York Stock Exchange (NYSE), becoming the first Wisconsin brokerage to do so. Keeping with NYSE tradition, The Wisconsin Company took the name of its lead partner, becoming Robert W. Baird and Company.

Baird stepped aside as the president of the company that same year. William Brand served as president until 1957, when Clarence Bickel stepped in as the company's third president. Growth during the 1960s and 1970s necessitated ever larger facilities. Leading the charge were Carl Wilson, named president in 1965, followed by Brenton H. Rupple in 1973, and G. Frederick Kasten in 1979.

The 1970s were marked by the creation of a new department, Public Finance. Public Wisconsin bonds proved to be an instant hit for Baird. During the 1980s Baird became Wisconsin's top investment banker but lost its independence.

Under Another Wing: 1980s90s

In 1982, Baird joined the Northwestern Mutual family of companies. Formed in 1857, the life insurance company was among the country's ten largest, known as "The Quiet Company" and for its tenacious hold to tradition. But the challenges of the early 1980s, including proposed changes in tax laws, climbing interest rates, and the AIDS crisis, forced a rethinking. The acquisition of Robert W. Baird and Company was part of its move toward diversification.

Northwestern Mutual bought 65 percent of Baird in the deal. In 1985 employees relinquished another 15 percent of their holdings to Northwestern Mutual "to help the insurance company manage its tax burden," according to the Business JournalMilwaukee.

When the stock market crashed in October 1987, Baird, unlike many other firms, was quick to recover, experiencing just one month of lossesthe only one recorded in its history. The effects of the crash lingered through 1990. But Milwaukee brokerage houses experienced a banner year in 1991.

"It was hard not to have a good year in 1991," wrote Peter Kendall for the Business JournalMilwaukee. "Interest rates plunged, stocks leaped to a record even before the Persian Gulf War was won, bonds went along for the ride and corporations came to the market to fill up on low cost capital."

Baird easily outpaced all previous years, aided by the dismantling of a rival brokerage, which had seen staff lost to the offices of its Chicago-based parent company. Kemper Securities Inc. had consolidated five separate subsidiaries in 1991, including Milwaukee-based Blunt Ellis & Loewi Inc.

Baird dominated in-state initial public offerings, participating in six of the seven made during the year, and captured eight other corporate finance offerings. The combined value was $800 million.

The firm was also the leader in underwritings by Wisconsin municipalities and government agencies. Institutional accounts also saw an increase as did managed accounts, a business segment established in 1989.

During 1992, Baird began picking up coverage of smaller local issues, hoping to "enhance its image as the leader in the region," according to Kendall. The move was also an effort to position itself to pull in business down the road from the companies it researched.

Baird marked its 75th year in 1994, a time when the stock market was experiencing huge mood swingsrising then falling then rising again. Kasten, meanwhile, had increased the number of office locations, the number of financial advisors, and the number of financial advisors serving institutions by more than four times. Baird had become the leader of its marketplace for corporate and public finance.

The firm had expanded outside its stronghold of Wisconsin, opening, for example, a public finance office in Chicago early in 1994. Then in 1995, Baird entered the Chicago investment banking arena, on the lookout for merger and acquisition, consulting, and underwriting opportunities. At the time a number of players in the market had internal distractions, leaving a crack in the door to the competitive market.

"But Frederick Kasten, Baird's president and chief executive officer, doesn't claim to have a crystal ball," wrote John Banker for the Business JournalMilwaukee. "We don't follow a strategy of taking advantage of the ebbs and flows in the market place," Kasten said. "We're driven by one factorto do what's right for our clients."

Baird lured investment bankers from the Chicago office of Kidder, Peabody & Co., including director of investment banking Paul E. Purcell, to aid the cause, but they would have a formidable task. In addition to regional players, Wall Street firms roamed the Chicago market.

Baird moved into new markets in 1997, bringing investment banking to Florida and Texas and announcing plans to open a brokerage and sell research on American companies though a London-based office. That year, a $10 million private offering raised the level of employee ownership to 36 percent. Northwestern Mutual continued to control the company, holding the remaining 64 percent. The company was valued at $165 million.

The move was prompted by increasing demand for equity ownership for the recruitment and retention of employees. Salaries and bonuses were no longer enough to satisfy brokerage employees. Baird needed to up the ante to compete with firms already offering greater ownership opportunities. Other firms had moved into the public arena following such an increase in employee ownership. But Northwestern Mutual, which held a majority of seats on the board of holding company Baird Financial Corp., maintained it had no plans to sell off the remainder of the company to employees in the near future, according to the Business JournalMilwaukee.

In 1999, Paul E. Purcell was tapped to succeed Kasten, in 2000, as CEO. Kasten had helped Baird "grow from a medium-sized brokerage firm to one of the largest regional firms in the country," according to the Milwaukee Journal Sentinel. Coming aboard in 1963 as a capital goods analyst, Kasten had served as CEO since 1980. His father, grandfather, and great-grandfather all had been the top executive of Firststar Corp., a company his great-grandfather helped organize. His successor, Purcell, had been named chief operating officer in January 1997 and president in January 1998. "I love Baird; the people are great and we're going to continue to build it the way it's been built for the last 50 years," Purcell told Kathleen Gallagher of the Milwaukee Journal Sentinel.

In 1999, Baird acquired the United Kingdom's Granville PLC. The independent investment bank had offices in Hamburg, Paris, and Barcelona, in addition to its London headquarters. The company was established in the early 1970s to introduce institutional investment into private companies, according to the Financial Times. Its original name was Nightingale, after one of the three founding partners. Robin Hodgson, chair and one of the three, gave the company his middle name when he retired in the late 1970s. The third partner, Nicolas Moy, remained with the company. Longtime investors were the pension funds of the Post Office, British Telecommunications & BG, and Friends Provident, sharing nearly 42 percent of Granville.

Regaining Independence: 200004

In 2000, Baird Advisors was formed, specializing in fixed money management, and bringing more new blood into the company. Northwestern Mutual planned to grant more employee ownership in 2001. Since 1997, the time of the last increase in ownership, the firm had boosted the number of financial advisors from 614 to more than 780; expanded services from 11 to 16 states; acquired Granville; and brought in some of the top talent in the industry.

Company Perspectives:

The foundation of any successful business is built upon a strong cultureon shared values of honesty, integrity, genuine concern for clients, and respect for associates. The Baird Way remains central to our ability to enjoy the quality client partnerships and high performance standards that have always been Baird traditions.

In addition to an increase in employee ownership to nearly 45 percent, there would be some relationship changes between the two companies. According to the Milwaukee Journal Sentinel, beginning in 2002, Northwestern Mutual was to make an internal subsidiary its exclusive broker/dealer for selling mutual funds and other securities: 4,500 of its agents had been licensed to sell investment products through Baird. The 9 percent of the company to be moved to employee ownership had an estimated value of about $27 million.

Baird Holding Company recorded its second best year in 2003 with net revenue of $544 million, up 4 percent from 2002's $524 million. It was the best year since 2000. The industry as a whole had been declining since that record-breaking year, off 40 percent from its peak. But Baird had experienced just a 6 percent decline.

In 2004, Baird regained its independence as an employee-owned company. Baird had helped Northwestern Mutual move into the investment products market, but the insurance company had developed its own investment services division. Northwestern Mutual would finance 80 percent of the purchase by Baird employees, and a contract with Baird for security transactions would continue though 2005, according to the Wisconsin State Journal.

As for Baird's future, said Purcell in a PR Newswire release: "In a very competitive industry, Baird has a great advantage because we are an employee-owned, fully independent company. We feel very strongly that Baird is a special place and others seem to agree, including FORTUNE magazine, which named Baird one of the '100 Best Companies to Work For' in 2004."

Principal Subsidiaries

Robert W. Baird & Co.; Robert W. Baird Group Ltd.

Principal Competitors

Jefferies Group, Inc.; Piper Jaffray Companies Inc.; Raymond James Financial.

Key Dates:


The First Wisconsin Company is established as a securities arm of the First Wisconsin National Bank.


The company is separated from the bank and renamed Securities Company of Milwaukee Incorporated.


The company modifies its name to The Wisconsin Company.


The company lists on the New York Stock Exchange as Robert W. Baird and Company.


The third president is appointed.


Company growth drives a move to new offices.


G. Frederick Kasten is named president.


Northwestern Mutual purchases majority control of Baird.


Granville PLC is acquired.


Employees increase ownership to nearly 45 percent.


Baird returns to independent status as an employee-owned company.

Further Reading

"Baird Completes Buyback Transaction, Becomes Employee-Owned Firm," PR Newswire, May 13, 2004, p. 1.

"Baird Realignment Facilitates Increased Associate Ownership," PR Newswire, April 10, 2001, p. 1.

Banker, John, "Baird's Chicago Foray: Good Timing or a Risky Move?," Business JournalMilwaukee, May 27, 1995, p. 9.

Gallagher, Kathleen, "Kasten, Architect of Baird's Growth, to Step Down As CEO," Milwaukee Journal Sentinel, February 23, 1999, p. 1.

, "NML Agrees to Deal with Baird," Milwaukee Journal Sentinel, April 11, 2001, p. 1D.

Harris, Clay, "Baird Buys Granville for L37m," Financial Times, October 12, 1999, p. 29.

Hoeschen, Brad, "Baird Increases Ownership Stake," Business JournalMilwaukee, February 27, 1998, p. 1.

Kendall, Peter, "As Baird Picks Up Neglected Stocks, Kemper Boasts Firepower," Business JournalMilwaukee, July 25, 1992, p. 7.

, "Stockbrokers Are Singing the Praises of 1991," Business JournalMilwaukee, January 13, 1992, p. 1.

Newman, Judy, "Baird Employees to Buy Rest of Firm from Northwestern," Wisconsin State Journal, April 22, 2004, p. E1.

Kathleen Peippo