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July 29, 2020

Philip Rodrigs on the Benefits of Investing in Small Companies

Raynar Portfolio Management’s CEO and Portfolio Manager explains why they favor small-sized firms 

Since Raynar Portfolio Management (RPM) launched its Flagship Strategy last month, the boutique investment firm has attracted more professional investors’ attention. They share RPM’s view that small businesses make for attractive investments. Since opening in January, Philip Rodrigs, Raynar Portfolio Management’s CEO and Portfolio Manager, is delighted with the firm’s ongoing success.

Philip leads a small team of investment specialists in their bid to identify investment opportunities that populate portfolios that strive to deliver optimal outcomes for clients. Raynar Portfolio Management is recognized for ‘searching high and low for great investments’ and taking a differentiated approach to their investment strategies. By including small companies in Raynar Portfolio Management’s scope, they increase their chances of uncovering hidden gems that might otherwise go unfound.

While many firms take the traditional approach of investing in larger companies, Philip explains that this is not necessarily a method that optimizes results. Large funds with too many assets under management don’t always lead to ideal client outcomes – and investing in large companies without considering smaller opportunities can cause investors to miss out on tomorrow’s big firms. Boutique firms are an essential part of a flourishing investment industry that shouldn’t be overlooked.

‘There is much talk about consolidation, and that bigger is better for the investment industry,’ Philip says. ‘However, as an investor who has always found excitement in focusing on smaller sized firms, I have a strong conviction that smaller can be better.’ 

Why Invest In Small Companies?

There are several reasons why investors should consider investing in small firms as part of a balanced investment portfolio. Philip explains some of his beliefs supporting why Raynar Portfolio Management has a strong focus on smaller companies:

  1. Small companies generally have greater potential to grow rapidly from small beginnings, compared to larger firms. The companies have greater scope to develop, transform, and expand.
  2. Small growing companies are likely to become increasingly efficient as they expand, growing their margins. They are more likely to benefit from economies of scale as they grow than larger companies that have already scaled up.
  3. Small firms tend to find value-enhancing investments that move the dial. Meanwhile, larger companies tend to overlook nascent opportunities that aren’t big enough to appeal to them.
  4. Most investors focus on large investment opportunities. With less interest in smaller companies, countless opportunities may be missed. More investors tend to look at companies if they have already expanded to some extent – this is when shares become better appreciated. Raynar Portfolio Management takes a more entrepreneurial approach, searching for investments in small companies that can grow.

As a boutique investment firm, Raynar Portfolio Management explores investment opportunities of all sizes to achieve clients’ best possible results. Still, it expects a predominant focus on the smallest firms. 

“Small-sized firms listed in the UK have produced demonstrable long-term outperformance of large-sized firms,’ Philip Rodrigs says. ‘As a small Investment Boutique ourselves, RPM is excited to search high and low for great investments with a particular focus on small-sized UK companies.’

Philip Rodrigs’ Raynar Flagship Strategy

Philip is delighted that despite launching his investment firm just six months ago, and despite the COVID-19 lockdown implications, clients have shown continued support throughout this difficult time. Philip’s industry-leading performance put the firm in an excellent position to launch the Raynar Flagship Strategy last month. Raynar Portfolio Management now offers two strategies for qualifying professional investors.

Philip modeled the Raynar Flagship Strategy on his former UK micro-cap strategy, which he developed for River and Mercantile in 2014. Following this strategy’s success, Philip drew inspiration from the best features to inform the new and improved strategy for Raynar Portfolio Management. The Flagship Strategy addresses investments in UK equities for the majority of stock market lifecycles, focusing on the smallest appropriate market cap segments. Unlike other investment strategies, the Flagship Strategy can reduce exposure to equities and prioritize other assets to preserve capital when investment conditions aren’t ideal.

About Philip Rodrigs

Twenty years ago, Philip Rodrigs invested a small gift from his grandfather, prompting his interest in finance, investment, and economics. Since then, he read Economics and Management at Lincoln College, University of Oxford, won a host of awards, conceived of a unique award-winning investment trust, and has grown and soft-closed funds worth hundreds of millions for various investment and asset management firms. 

In 2020, Philip launched Raynar Portfolio Management, London’s new boutique investment firm. Raynar Portfolio Management is founded on Philip’s numerous successes and specialism in UK small-cap stocks. As Raynar Portfolio Management’s founder and Portfolio Manager, Philip is devoted to achieving impressive results for all of his clients. He continuously studies business success strategies to inform the firm’s unique investment strategies.

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