Having joined from Investec in January 2014, Rodrigs was the named manger on the £900m R&M UK Smaller Companies and £375m UK Dynamic Equity funds, and the £120m closed-ended River & Mercantile UK Micro Cap trust.
The management of each of the funds has passed to the alternate mangers, with Dan Hanbury taking over UK Smaller Companies, William Lough assuming control of UK Dynamic Equity and George Ensor being named lead on the Micro Cap trust.
The group said the conduct issue was unrelated to Rodrigs’ portfolio management responsibilities and has not affected the pricing or net asset value of any of the three funds, with no client or investor being negatively impacted.
The news though is undoubtedly a blow, with the UK Dynamic Equity fund first quartile over one and three years, and the investment trust being the top performer in the IT UK Smaller Companies sector over the last 12 months.
Launched in December 2014, it is the second best performer over three years with a return of 104.7%, well ahead of the sector average gain of 56.95%. This strong performance has lead its discount to NAV to move from a 9% discount at the start of last year to a 7.9% premium.
James Barham, chief executive at RAMAM, said: “It is disappointing to have to take this course of action but we have acted swiftly to ensure that the portfolios continue to be managed in line with our PVT investment philosophy and process. This will ensure that we continue to deliver market leading investment returns for our clients.”
Jason Hollands, managing director at Tilney Investment Management, described Rodrig’s departure as a big shock within the UK asset management industry “and the sort of announcement any business, let alone a listed one, would dread having to make”.
“The substance of the issue that led to this departure is unknown but River & Mercantile have stated ‘no client or investor has been negatively affected’ so it seems the main pain will be felt by the business itself,” he added.
Hollands said that Rodrigs was widely seen as one of the rising stars of UK equity fund management who earned his spurs at Investec where he initially focused on UK smaller companies but had expanded his repertoire out to manage multi-cap UK equity funds.
While neither of the open-ended funds he ran at River & Mercantile were on Tilney’s “buy list”, Hollands said he had started to deliver some impressive performance since taking over the UK Dynamic fund.
With regards to the handover of management duties, Hollands said: “I think most advisers who have supported these funds will want to meet the managers rather than rush hastily into to a decision, which is sensible.
“For those disinclined to wait and see or who might now be looking elsewhere for further investments, competitive UK multi-cap funds to consider as alternatives are Liontrust Special Situations and the JO Hambro UK Dynamic fund and in the small-cap space, Franklin UK Smaller Companies, Fidelity UK Smaller Companies or Liontrust UK Smaller Companies.”
Darius McDermott, managing director of Chelsea Financial Services, said while the news is a shock, he is keeping the R&M UK Smaller Companies fund, on Chelsea’s selection list.
He said: “Dan Hanbury, who is alternate manager of the fund and ran it before Philip joined the company, is a very good manager, and has the support of a very strong team who all input into the PVT investment process. For this reason, we are happy to keep the fund on the Chelsea Selection for the time being, pending a meeting with Dan to reassure ourselves about its future.”
