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Rodrigs on launching an asset manager in a pandemic

Rodrigs on launching an asset manager in a pandemic

Fund manager Philip Rodrigs has disclosed his experience when launching an asset management business during the pandemic and why he believes certain methods of working are here to stay.

Following a 16-year career as an analyst and fund manager at firms such as Invesco, Investec and River and Mercantile, Mr Rodrigs launched Raynar Portfolio Management this year.

He is chief executive and majority shareholder in the business. The firm’s first fund, Raynar Enhanced Portfolio, was launched in February, just prior to the full impact of the virus becoming apparent. It is run by Mr Rodrigs’ partner in Raynar, former Julius Baer fund manager Matthew Taylor.

The firm’s second product, the Raynar Flagship Portfolio, which is run by Mr Rodrigs, was launched on June 1, at the height of the pandemic.

Mr Rodrigs said: “We were quite well set up in terms of remote working ourselves. And while client meetings were of course different, I think most of the industry adapted well.

“One of the things that remote working made easier for firm such as ours was that during the lockdown, it was a lot easier to get time with the management of the companies we like. In normal times they set aside a few days a year to meet with investors, and you have to grab a slot then, but during lockdown it was easy to grab a few minutes with them.”

Mr Rodrigs doesn’t expect the industry, or the wider economy, to return completely to previous methods of working either.

He said: “What we are seeing is that working remotely is not only possible but desirable in many cases.” 

Another aspect of increased technological adoption was that some traditional methods to value companies were no longer relevant, he said.

One example cited by Mr Rodrigs was the “price to book” valuation method historically used by fund managers.

This method seeks to value the individual, tangible assets of a business, and compare that with the prevailing value of the company’s equity. This method is central to the value style of investing which has underperformed in recent years.

Mr Rodrigs said technological companies tend to have relatively little in the way of tangible assets, as when they expand, they do not need to buy new machinery or premises in the way that a traditional business does.

This means that using the price to book method makes technology companies look very expensive relative to traditional businesses.

Mr Rodrigs said in a world of rapid technological change it may be that the best measure of a company’s value is the level of cash generated, rather than the level of assets owned. 

Raynar had assets under management of £45m at the end of June 2020 with LoopUp, a video conferencing company, being one of its largest holdings. 

The Flagship Portfolio returned 3.5 per cent in June, while holding around 50 per cent in cash.