Manager Research
all members of our manager research team have over ten years of investment experience.
As part of our ongoing fund research process we regularly revisit funds we have covered in the past. We have recently completed our review of the RECM funds – clients will be aware that RECM funds have been ‘Under Review’ for some months, and given the material changes more recently we needed to make sure that we had all bases covered before we concluded with our ratings. Unfortunately we have needed to change the rating on the RECM funds we cover to Tier 3 across the board. Our original Tier 2 rating highlighted some issues we were concerned with – around how the business was dealing with succession, breadth and depth of the investment team given their broad mandates, and a few other more technical issues. The succession challenge is difficult for all asset managers, but particularly in the case of a ‘boutique’, where the founder has been so instrumental in how investments are managed. In this case the business is still struggling to solve this, with the recent departure of their CIO evidence of this. RECM management are taking this challenge very seriously, however it’s a particularly more complex problem given where they are in the performance cycle. To be clear on this – the changes underway at RECM are not entirely performance related – they would expect some level of negative relative returns as that is the nature of their process. For this reason we would caution clients who are invested from making any investment decisions on the fund for performance reasons.
RECM Funds Rating Review and Rating changes
29 Mar 2015