We know all we've accomplished or achieved for our clients over the last century positions us to serve them well in the years ahead, wherever their financial futures may take them.
President & Chief Executive Officer
With extraordinary opportunity comes distinct responsibility. As a financial partner to individuals, families, companies and communities around the world, Baird has an opportunity to make a positive difference in their futures. We also have a responsibility to provide them with the thoughtful advice, deep expertise and true partnership they need to achieve the future they envision.
We don't take that responsibility lightly and deeply value our clients' trust. We work to earn that trust by continuing to build our capabilities for our clients. We are very pleased to share we welcomed Hilliard Lyons, one of the nation's oldest investment firms, to Baird in early 2019. Headquartered in Louisville, Kentucky, the firm offers an array of wealth management and financial services capabilities, including a trust company, and shares our values of honesty, integrity and putting clients first — always. We are honored and humbled Hilliard chose to partner with Baird and together we will expand the number of families, businesses and communities we are able to serve.
The strength of our team contributed to other major developments across the firm. We were named among Fortune's 100 Best Companies to Work For® in early 2019, ranking No. 16 in our 16th consecutive year on the list and 11th consecutive year among the top 25 companies.
Our focus on providing quality advice and service to our clients as well as managing our businesses for the long term drove a year of strong business outcomes and strategic progress at Baird. The firm's 2018 revenues were $1.78 billion, our ninth consecutive year of record revenues and a 16% increase over 2017's strong results.1
1 Financial results do not reflect the consolidation of certain private equity partnerships.
Operating income totaled $244 million, our best result to date and up 22% from 2017. Our return on book value was 22.6%, a strong result we believe is among the highest in our industry. We attained these results without the significant leverage other firms rely on to enhance returns.
Our platform of five complementary businesses not only broadens our capabilities for clients — it diversifies and balances our sources of revenue across market cycles. Each of our core businesses performed well in 2018, even though some faced very difficult market conditions, and we continued to gain market share in competitive markets. Our Private Wealth Management, Asset Management, Equity Capital Markets and Principal Investments businesses generated record results in 2018, and there were numerous strategic highlights across each of our core businesses:
These results demonstrate more than the strength of our balanced business platform — they speak to the strength of our team and our culture. As an employee-owned firm, we don't need to manage our business to align with the expectations of outside shareholders. We can take a long-term view when investing in our businesses, and we do exactly that with our clients' needs squarely in mind.
2 Ipreo MuniAnalytics as of December 31, 2018, based on lead managers. Does not include private placements or notes.
Baird stock performance is based on the change in book value per share for Baird Financial Group common stock and includes cumulative cash dividends per share of $7.50, $1.60, $1.65, $1.85, $2.00, $7.50 and $2.10 paid in December of 2011, 2012, 2013, 2014, 2015, 2016 and 2017, respectively. Baird is privately held and no public market exists for its shares. Baird can repurchase shares of Baird stock at book value when associates leave the firm. Past performance does not guarantee future results.
These qualities are why we were able to continue to grow our businesses in 2018, strengthening our presence in areas where clients seek our expertise.
In addition to Hilliard Lyons, we welcomed M. Griffith Investment Services to our Private Wealth Management business in late 2018. As an independent and employee-owned firm, M. Griffith shared our cultural values and clients-first philosophy. The firm is now fully integrated into the Baird platform and expands our footprint in the Northeast. We also welcomed Strategas, a leading boutique macroeconomic research firm, to Baird in January 2018. Strategas is a wholly owned yet independent Baird company, and its insights are being leveraged by businesses across the firm. John Taft, a wellknown financial industry veteran and thought leader, joined Baird as Vice Chairman and member of our Executive Committee in January 2018. He continues to pursue strategic business opportunities for the firm and champions our brand in the marketplace.
We were able to evaluate, pursue and realize these opportunities because we have extraordinary people at Baird. Our team includes more than 3,600 talented associates who serve clients from our more than 100 locations across the globe. Their clients-first attitude, subject matter expertise and genuine caring for others transform the work we do. That's why we remain committed to cultivating a work environment where everyone can come as they are and thrive. We believe our diverse backgrounds, viewpoints and strengths make us a better team and make us better for our clients.
We're working hard to maintain our unique culture as the firm grows. One way we do this is by continuing to hire exceptional talent who embody Baird's values of teamwork, honesty, respect and excellence. More than 1,000 associates have joined Baird since the financial downturn, and we also look for cultural compatibility in all of our potential partnerships and acquisitions.
Our culture is also enhanced by the fact we're employee-owned. With our own capital and reputation on the line every day, we have a personal stake in our clients' success. We wish to extend the opportunity of ownership to as many of our associates as possible. Today, approximately 66% of Baird associates are shareholders in the firm, with a broad distribution of ownership across all levels of seniority and business lines.
Baird will celebrate its 100th anniversary in 2019. As we head into our centennial year, our founding credo continues to guide all we do: Clients come first — always. As we guide families toward strong financial futures, help companies achieve their full potential and support the communities we call home, we are reminded ours is a business of relationships — which, through shared values and common goals, can become powerful partnerships. We're proud to partner with our clients and will continue to build our capabilities to best serve them in the years to come. Through this true partnership, we can go far together.
Steven G. Booth
President & Chief Executive Officer
Paul E. Purcell