This has been part of his quest to raise money for The Brain Tumour Charity, in memory of his sister, who died of a brain tumour at the age of 32.
So far, he has raised more than £300,000, having also swum the English Channel. Training for the swim, which took place last month, has involved tying himself to trees and swimming against the current in mill ponds. He completed four 10 mile swims as part of the preparation.
The swim was 42.8 miles in length, and Royden swam constantly for 36 hours, treading water every hour to receive food and drink from a boat. Only seven people have ever completed what is known as the 'ultimate trophy swim’, and Royden is now the eighth.
He says: “Endurance swimming is not for everyone. The community of us around the world probably comes to 200. But I’m no good at running, and this is a bit off-piste and gets people’s attention.”
The off-piste nature of his hobby is also reflected in his career prior to JM Finn, the City business with assets under management of £11bn, as he co-founded and subsequently sold a business (ECU) involved in raising mortgage capital for UK homeowners using the yen currency. He has also been a derivatives trader, as well as a consultant to companies seeking to raise new capital on the stock exchange.
Royden’s first job was as an options trader for Kleinwort Benson in 1985, but within a year he had quit to co-found ECU, which grew to have offices in four countries.
He says: “The business was set up with some of my university friends. One of the opportunities we saw was that interest rates got as high as 12 per cent in the UK for people who wanted a mortgage. So what we did was, we would arrange for homebuyers to borrow the money in Japanese yen, which could be borrowed at very low rates.
"We would then convert the yen to pounds so they could buy the property, but the mortgage they paid was to a Japanese bank at very low interest rates. If the yen got too strong, we would switch to the Swiss franc in order to keep the interest rate low.”
He and his partners sold the business in 1997, just as UK interest rates began their downward trajectory.
Royden then spent two years studying for an MBA, and doing consultancy work for a variety of businesses, on activity ranging from mergers and acquisitions, to preparing for stock market listings.
He joined JM Finn in 2011, initially as head of fixed income research, before taking over the running of the entire investment research department and jointly managing the company’s in-house fund range, Coleman Street Investments.
Luck plays a part
At the start of the pandemic, Royden took a contrarian view.
In February 2020, JM Finn sharply reduced client portfolios' equity exposure, as Royden feared the impact of the pandemic, and then bought the equities back in late March when they were cheap, just as many other market participants were becoming aware of the pandemic, and were selling their equity holdings.
Royden says: “There was quite a lot of luck involved in the decision we made. It turns out to have been the right decision, but it was not just skill, there was luck involved as well.
"We were paying attention to what was happening in China, and then, when the sell-off happened in equity markets, we did some work to look at the impact that one year of lost earnings would have on companies, and what the share prices should be if they lose a full year's earnings.
"Our view was that valuations reflected the lost earnings last year, and more, for many equities, and that made it a good time to invest in them, and so it has proved.”
The management of income portfolios is a major part of Royden’s role at JM Finn.
A world of very low bond yields and very highly priced equity markets, at the same time as clients' need for income remains, means constructing income portfolios is arguably more difficult than it has ever been in history.
But Royden says the answer is simple: clients must accept that the income they receive will arrive in a different way, that is, from capital.
He adds: “We are quite happy to say to clients that they can take 5 per cent a year of income, but this won’t be the traditional way that income is generated, from the income of the underlying investments. Instead it will be a combination of capital gains [from selling investments] and dividends.
"The reality is we are now in a position where some of the growth stocks have high yields. Clients do not have a problem with that. I understand a lot of people use investment trusts for income, but it is very difficult for us to do, given our size.”
JM Finn is majority owned by a Belgian bank, with employees also having a share.
While there is a centralised buy list, and research produced by Royden and his team, the individual wealth managers around the country “are free to ignore it and do their own thing”, he says, “this means what we create is very bespoke to each client. It is not just about centralised investment propositions.”
One of the conversations he has with clients to help them understand risk is to calculate “in pounds, shillings and pence”, the losses a portfolio could incur on any single day in a 100-day period, and he feels clients then understand how much risk they are taking.
New ways of working
In addition to the vast volatility experienced by his investors over the past year, Royden and his colleagues have experienced new ways of working and interacting with clients.
JM Finn has offices located in the British provinces, and Royden says the business is already seeing long-lasting changes in how clients interact with the company.
He says: “We are finding that a lot of commuters lived in the towns where we had offices, but couldn’t go there as they spent most of the day in another city, and would instead visit the office in that city if they could.
"But now, they are delighted with the regional offices as they work from home. And what our staff find is, many of the investment managers wanted to be in the cities as that meant they could more easily meet the fund managers, but with Zoom meetings, they can do that from anywhere, and now want to work from the regional offices.”
He says the number one lesson he has learned in the industry is “to hire the right people".
"You will find if you do that, then the problems are easily solved.”
David Thorpe is special projects editor of FTAdviser
