Former River & Mercantile manager Philip Rodrigs has unveiled his first investments as he starts afresh with his first fund at his boutique firm Raynar Portfolio Management.
The £13.1m Raynar Flagship fund, which launched in June and is only available to professional investors, returned 3.78% over the first month, according to its inaugural factsheet, despite less than half the portfolio being invested.
“Preserving the remainder of the capital for future high conviction ideas makes sense to me, rather than buying more mediocre options in a hurry,” Rodrigs told Portfolio Adviser.
Loop Up, a rival to Zoom, is among the largest holdings with a 6.2% weighting. Rodrigs said the valuation disparity between the two stocks reassures him about any “David versus Goliath” risk.
“Loop Up has already built an enviable roster of international high-end professional services enterprises as clients, whereas Zoom’s heritage is more at the consumer end of the scale. There is plenty of space in the global market for more than one firm, and Loop Up’s long term client base attests to it providing a well-regarded offering.”
Bigblu Broadband is the largest holding representing 6.9% of the portfolio. Rounding out the top-five holdings are Maxcyte, Centralnic and Gear4Music.
He said the portfolio would be fully invested “when there are sufficient high conviction ideas to fill the whole portfolio”.
The uncertain economic backdrop made that timeline difficult to predict, he said. “This deep recession makes the financial performance of the vast majority of listed companies, which are exposed to the economic cycle, hard to predict, and yet many are on high valuations due to stimulative monetary conditions.”
Nevertheless, he said he had found more high conviction ideas than he initially expected.
The fund can invest across the market-cap spectrum but almost all investments so far have market capitalisations below £1bn, which Rodrigs attributed to “very attractive” valuations in smaller companies compared to similar larger-cap peers.
Rodrigs launched Raynar Portfolio Management in February, two years after he was dismissed by his former employer River & Mercantile. He is currently disputing the dismissal, which he has previously said relates to attendance at an industry event.
Raynar Flagship launched hot on the heels of the Raynar Enhanced strategy, which the firm unveiled in February and is managed by Matthew Taylor.
