U.S. markets closed

Royce Investment Partners Commentary: Annual Royce Investment Partners Firm Update

Watch full video here.

In December 2019 we announced that we were rebranding as Royce Investment Partners. This decision marked the culmination of five years of work to reposition the firm for the best investment outcomes and client experience for our constituents.

Our firm has changed dramatically over this period in terms of our fund lineup, the number of vehicles we offer, and our corporate structure. Equally important, we wanted our new brand to underscore the ethos of partnership that has defined our firm over the 45 years of its existence. Partnership, both internally and externally, is a key attribute of our success.

We spent a great deal of time working to develop a product lineup that suits the ever-shifting needs of the investment management marketplace. We rationalized our mutual fund lineup and expanded the number of other vehicles, making our offerings easier to distinguish for different clients in different distribution channels.

New Offerings

Our constituents' needs have changed, and we've changed with them. We've expanded our offerings to include collective investment trusts (CITs), separately managed accounts for institutions, brokerage-sponsored SMAs, and sub-advisory accounts.

We think that our high-quality small-cap approach, most familiar in Royce Premier Fund, is very well suited for the SMA marketplace because of its concentrated portfolio and long-term orientation. For taxable investors, we think offering Premier through an SMA makes sense. We also suspect that a dividend-paying strategy--such as we use in Royce Total Return--would work well in this setting--and so we plan to offer that strategy for SMA clients as well.

Collective investment trusts for these and our other major investment strategies--Pennsylvania Mutual, Special Equity Fund, and Opportunity--are equally appropriate for the retirement-plan channel. We have existing CITs in our dividend-paying (Total Return) and deep value (Opportunity) strategies--and we also plan to offer them in our other major strategies.

Strengthening Our Investment Team

In an asset management world that has become bifurcated between active and passive approaches, we have put a stake in the ground for highly active, fundamentally based investment management rooted in the conviction that our asset class is best suited to it. Critical to this effort is the quality of our investment team, which we believe is one of the deepest and strongest in the small-cap asset class.

In order to sustain this commitment, we recognize the importance of building and investing in our team--it's the lifeblood of our organization. In the last year, we've made several additions, both to our fundamental research team for our major strategies and in our Quantitative Strategies Group, which is becoming an increasingly important part of how we think about our work.

Small-Cap Experts, Advocates, and Guides

As small-cap specialists for more than four decades, we're uniquely positioned to provide insights on this asset class--and have a rich history of doing so. We've always seen an important part of our mission as being passionate advocates for, and intelligent guides to, the world of small-cap investing.

We're committed to continuing to provide thoughtful and timely market commentary infused with the unique perspectives we've developed as notably experienced small-cap investment specialists.

In addition, we've published what we think are two especially compelling research papers. The first is an in-depth case for allocating to international small-cap stocks--an underinvested asset class with historically strong fundamentals. The second comes details how we uncovered a striking connection between value-led markets and the success of active small-cap management.

Our clients can look forward to more innovative research about small-caps in the months ahead.

The thoughts and opinions expressed in the video are solely those of the persons speaking as of January 13, 2020 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.

This article first appeared on GuruFocus.