River and Mercantile Asset Management high profile portfolio manager Philip Rodrigs has been ousted from the business with immediate effect following an investigation into “a professional conduct” matter.
Since December 2017, the company at the £32.6bn fund group has been investigating Rodrigs and found he was “incompatible with the high standards and expectations we hold”, the firm says, but couldn’t reveal the exact motives behind the disciplinary action.
Rodrigs, who joined the firm in 2014 as a partner from Investec, was lead manager on three funds at the group; the R&M UK Equity Smaller Companies, the R&M UK Dynamic Equity, and the R&M UK Micro Cap Investment Company Limited funds.
The company says the disciplinary action was not related to his work as fund manager and that either the net asset value of the funds or clients have been affected by the decision.
RAMAM chief executive officer James Barham says: “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.”
The responsibility for running the three funds have been distributed internally to other fund managers. The firm says the succession for Rodrigs was in the plans for “a while”.
Dan Hanbury will manage theR&M UK Equity Smaller Companies as he did prior Rodrigs’ appointment, the multi-cap R&M UK Dynamic Equity fund will be managed by William Lough, and management of the R&M UK Micro Cap Investment Company Limited fund will be run by George Ensor.
Barham adds:“It is always frustrating to have to announce changes to the portfolio management team, especially as we have always maintained a very strong investment platform.
“However, our potential, valuation and timing investment approach will continue to be applied in the same robust and consistent manner to ensure that the excellent track record we have thus far achieved, in which every one of our portfolios has outperformed its benchmark since inception, continues.”
“A big shock”
As a result of Rodrigs’ departure, Hargreaves Lansdown has removed the fund from its Wealth 150 list. Senior analyst Laith Khalaf says: “We are looking for the managers with a long track record. Unless the manager who takes over the fund has equal experience, we will take the fund off the list.
“We will inform everyone who holds the fund [of our decision].”
Tilney Group managing director Jason Hollands says the news comes as “a big news shock” for the UK asset management industry.
He says: “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. At River & Mercantile he had assumed responsibility for the River & Mercantile UK Dynamic fund while continuing to manager the R&M UK Equity Smaller Companies fund. Neither of these funds were on Tilney’s ‘buy list’ but had started to deliver some impressive performance since taking over the UK Dynamic fund.
“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.”