WS Raynar UK Smaller Companies
Managed by Philip Rodrigs, this fund holds between 70-90 stocks with the aim of being both high-conviction and diversified in nature. Philip favours firms with strong management and clear growth catalysts, priced at attractive valuations.
Our Opinion
Fund Manager
Fund Manager
Philip Rodrigs, Fund manager Philip Rodrigs is the lead portfolio manager of this UK smaller companies fund, as well as the founder of Raynar. Prior to founding the firm, he had considerable success managing UK smaller companies funds at Investec and R&M. At those firms, he established a proven track record of sector-leading returns from 2006–2017, underscoring his ability to deliver sustained outperformance in the UK small-cap market. Rodrigs holds the CFA and has received multiple industry accolades, including: Investment Week UK Smaller Companies Fund Manager of the Year (2010 & 2011), Morningstar’s Outstanding Rising Talent (2012) and Financial Express UK Smaller Companies Alpha Fund Manager of the Year (2016).
Philip Rodrigs, Fund manager Philip Rodrigs is the lead portfolio manager of this UK smaller companies fund, as well as the founder of Raynar. Prior to founding the firm, he had considerable success managing UK smaller companies funds at Investec and R&M. At those firms, he established a proven track record of sector-leading returns from 2006–2017, underscoring his ability to deliver sustained outperformance in the UK small-cap market. Rodrigs holds the CFA and has received multiple industry accolades, including: Investment Week UK Smaller Companies Fund Manager of the Year (2010 & 2011), Morningstar’s Outstanding Rising Talent (2012) and Financial Express UK Smaller Companies Alpha Fund Manager of the Year (2016).
Risk
Company Description
Fund Performance
Risk
Company Description
Investment process
Rodrigs believes the structure of the UK market is ideal for stock pickers, and that a fundamentally-driven, high-conviction, bottom-up stock selection approach has the potential to generate substantial alpha. Raynar’s investment philosophy is based on five core pillars:
1. Sales growth: They target faster-than-average sales growth.
2. Margin growth: They look for companies that can grow margins through improving economies of scale.
3. Accretive cash redeployment: Preference is given to firms that have the opportunity to deploy cash in an accretive fashion.
4. Illiquidity risk premium: The smaller the firm, the greater the potential for a re-rating as the illiquidity risk premium ebbs, thus they seek companies whose share price trades materially below intrinsic value.
5. Sentiment trends: They aim to capture upside as company visibility grows and investor attention increases.
The investable universe consists of around 400 UK smaller company stocks. At initiation, companies must have a market cap greater than £100m. The team then undertake initial evaluation on this list, looking for companies that can deliver substantial shareholder value creation. This is generally signified by having a leading market position, clear business strategy and a strong management team. If a company passes those criteria it is moved onto deeper analysis where they look for a share price that is in disconnect with perceived intrinsic value. They model around 100 companies and search for cases where the earnings have been under forecasted. Interestingly, they favour firms that may have been poorly managed in the past, as this offers recovery potential — often identified through the numerous company meetings they hold each year. One of their key differentiators is their willingness to act quickly after a positive meeting. While many fund managers wait several months, Rodrigs prefers to move fast, arguing that delay can invalidate previous analysis. The final portfolio is made up of between 70-90 holdings diversified across sectors and size.
Risk
Rodrigs and the team regularly review portfolio risk. They assess stock-specific risk, portfolio interaction, and their sell discipline, alongside conducting systematic reviews. Risk committee meetings are held to ensure oversight, and diversification is used as a tool to cushion the impact of any underperforming positions.
ESG
The fund doesn’t place a focus on ESG criteria.