CEO Chris Clark on Our Strategic Initiatives
article , video 02-23-2018

CEO Chris Clark on Our Strategic Initiatives

Royce CEO Chris Clark discusses new initiatives, including new types of investment vehicles that appeal to a wide array of potential investors.


What strategic initiatives is Royce focusing on?

Royce grew up in the golden era for mutual funds. Our firm dates back to the early '70s, and for several decades, mutual funds were the vehicle of choice for a broad array of investors, from individuals to institutions to endowments and foundations. Well, as the asset management industry has evolved, so have the vehicles that investors choose to use within their specific settings. Royce for the past couple of years has been working very hard to differentiate the types of vehicles that we offer to potential investors.

We are not a mutual fund firm in terms of the way we operate. We are small-cap specialists, and we want to make sure that the broadest array of investors that want to avail themselves of our investment expertise have the opportunity to do that through the vehicles that are best suited to accomplishing their objectives, such as collective trusts, SMAs, institutional separate account, and sub-advisory activities.

Are international small-caps a strategic focus?

We believe that international small caps are still a new frontier for the investment community. It is still a highly diverse set of companies across many geographies and jurisdictions. It's highly labor-intensive. It's highly differentiated. Those are the prime settings for successful active management.

Dating back to 2006, we began our efforts by hiring dedicated international investment professionals to begin working on this wonderful asset class. In 2010 we launched dedicated international small-cap strategies and we believe that we're really in the early innings of a very long tenure for this segment of the market.

What is underappreciated about international small-caps?

The uncorrelated characteristics of the businesses. Again, this is a multi-geographical segment where companies are being, you know, driven by local activities. We think there aren't a lot of institutional resources yet that have been brought to bear on analyzing this segment of the market. We think in general, it does not have a lot of dedicated institutional investors investing in it and it is not yet a permanent part of traditional asset allocations.

All of those things I think drive high inefficiency, and inefficiency is really the Holy Grail for active investment managers.

Important Disclosure Information

The thoughts and opinions expressed in the video are solely those of the persons speaking as of January 9, 2018 and may differ from those of other Royce investment professionals, or the firm as a whole. There can be no assurance with regard to future market movements.




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