posted its second highest net revenue ever in 2022 at $2.79 billion, a more than 18% drop from the prior year, according to figures released by the firm.
The biggest shift from 2021, when Baird saw net revenues reach $3.41 billion, came in the company’s equity capital markets business. In 2021, the firm completed 404 advisory and financing transactions with a combined value of $179.7 billion.
This past year, the number of transactions dropped to 153 worth a combined $67.8 billion.
The result was a nearly 53% drop in revenue from $1.28 billion to $607 million. Despite the significant decline, the 2022 result would have been a record in any other year for the company.
"The cross-currents in the markets affected our businesses in very different ways throughout the year,” Steve Booth, chairman and chief executive officer of Baird, wrote in his message accompanying the firm’s annual report. “We've purposefully built a balanced platform of five complementary business units since our founding in 1919. Our diverse end markets and balanced revenue structure adds another powerful dimension of resilience to Baird, as market challenges in one business can be offset by strength or stability in another.”
Baird’s private wealth management business, the largest of the company’s business lines, did see revenue grow 6% to nearly $1.5 billion.
“In a year where markets began at all-time highs but came under stress due to macroeconomic factors and recession risks, we helped clients navigate the increasing economic uncertainty,” Booth said of the private wealth management business.
Elsewhere in the firm, the asset management business saw its revenues decline from $352 million to $338 million, a roughly 4% drop. The fixed income capital markets business was down 8% from $248 million to $228 million.
The principal investments business saw revenues decline from $106 million to $52 million.
Baird’s operating income fell 21.7% to $477 million, a slightly sharper decrease than the firm’s topline results.
Still, the per share book value of Baird stock, including cumulative dividends, was up from $37.11 at the end of 2021 to $41.87 at the end of 2022. Return on book value declined from 33.4% to 19.9%.
Baird’s workforce grew to 5,077 associates, up from 4,703 at the end of 2021. The company now has 1,393 financial advisors, up from 1,309.