Philip Rodrigs, who was "compulsorily retired" two years ago by River & Mercantile for what the firm called a professional conduct breach, has returned to the asset management industry with the launch of his own boutique investment management business.
Raynar Portfolio Management will be aimed initially at high net worth and sophisticated investors. Rodrigs sat down with David Brenchley to talk Investment Week through his new proposition.
Why did you decide to launch your own company?
It is something I have been wanting to do for a long time. As a small-cap fund manager, I have had the privilege of meeting hundreds, if not thousands, of senior management members, and a lot of them are very inspirational people.
Being at the helm of my own firm gives me the opportunity of instilling a culture from the beginning. This is deeply seated within me, a client-focused organisation.
It is an absolute core precept to run the business ethically: focusing on client outcomes first and foremost.
What was your thought process around launching new strategies?
Conceiving of, creating and IPOing the River & Mercantile Micro Cap investment company was very exciting for me.
We were able to deliver very strong performance for clients and return very substantial amounts of capital back to the investors within a relatively short period of time. Designing that investment company to have a limited AUM was absolutely key to the success of that strategy.
We are trying to design our strategies with that entrepreneurial attitude and identifying ways in which we can improve client outcomes.
We are not a company that is all about raising assets under management at all costs.
We have decided to launch and focus on alternative investment funds. That means we are providing strategies exclusively for those high-net-worth and sophisticated individuals that fulfil the requirements to be eligible to be classed as professional investors.
Have you launched any strategies already?
Raynar Enhanced Portfolio is launched with £10m of assets under management and commitments for £25m in total. That is a strong starting base for us, and we have got a clear pipeline of opportunity as well.
That is managed by Matthew Taylor, who spent many years working at the private bank Julius Baer providing investment advice to a wide range of clients.
Having been able to have a look at how Matt has designed and constructed what is now known as Raynar Enhanced Portfolio, it is very well thought through and delivers attractive outcomes for clients.
I would think of it as a fund of funds, multi-asset proposition, investing in equities and bonds, and Matt has also shown a great knack and flair for identifying exciting new fund managers.
The enhancement comes by judiciously applying leverage to enhance returns, but also providing the ability to add diversification into the portfolio to a greater degree than might otherwise be the case.
Do you have plans to launch more strategies?
I am itching to get back into the investment markets. I will be running Raynar Flagship, which will be launched in due course.
It will come as no surprise that it is going to be focusing on the core areas which I have concentrated on for the majority of my career - small and micro-cap investments listed on the UK stock exchange predominantly, although there is scope to look overseas selectively as well.
It will also have the ability to take on a modest degree of leverage.
The key issue that I have as a portfolio manager is I never have exactly the right number of ideas to fill a portfolio, so for the design of Flagship, I am looking to provide the opportunity to accommodate that variance.
The investment objective allows for the equity component to be much less than fully invested and, in that case, the multi-asset opportunities will be focused on a goal of capital preservation.
Sometimes the best way to make money out of an asset class is not to be invested in it at that particular moment, but keep your powder dry for the time when it is very attractive to invest.
What is your view of your dismissal from River & Mercantile?
I was quoted two years ago that I disputed River & Mercantile's decision, and I still do. That matter remains open and ongoing, therefore there is a limit to what I can say.
The issue at stake was my attendance at a normal industry event. I was shocked when senior management informed me that they considered that it was not appropriate for me to attend that meeting.
There were around 20 other industry participants attending that event [and] I have not heard that any one of those have lost their job as a consequence of going to that meeting.
You were also party to the emails that got Newton Investment Management's Paul Stephany sacked and fined by the FCA for attempting to influence pricing on a number of IPOs. RAMAM and Hargreave Hale were also fined for their part in that. Were you ever investigated by the FCA in relation to it?
I have never been investigated by the FCA. I helped the FCA with their inquiry as anyone should do.
It is obviously the case that I could not be sitting here today having this conversation with you about the launch of Raynar if I was unable to work in the industry.
It stands to reason that I have been found to be fit and proper to perform a regulated role.
It can be deduced from public information that I am identified as one of those individuals that were contacted by Stephany.
It is also a matter of public record that RAMAM had no competition law policy in place at the time there was the regrettable communication with the instigator.
With the benefit of subsequent training, it will not happen again.