Charles M. Royce came to fame when he was mentioned among the richest Americans by Forbes. He was featured in an article titled the 6 Stolen Stock Picks for an Uncertain Market. John Dorfman highlighted Mr. Royce in the annual portfolio named purloined portfolio. He is one of the six portfolio managers mentioned but the most preferred not only because of his success but also his business philosophy.
Background
Chuck’s leadership of the Royce Funds began in 1972. His tenure has lasted for more than 46 years. During his tenure at The Royce Funds, Chuck Royce has built the asset management company into a leading player in small-caps, with over $2 billion in total assets under management. Royce and Associates serves as the investment adviser to the rest of the Royce portfolios. These portfolios included both closed-end and open-ended mutual funds.
Chuck has maintained the use of a bottom-up approach to investing in small-cap and micro-cap stocks. It is a strict, value-oriented approach, which attempts to pay close to risk and company basic fundamentals.
Charles Royce has proved to be one of the pioneers of small-cap investing with a half-century of experiences. Having served the company for over 4 decades, he has been responsible for managing eight funds. Royce has a bachelor’s degree from Brown University and a Master of Business Administration from Columbia University. He led the company to an average annual total return of 15%. The long years of near-perfect performance led to his reliability and long term manager at the firm.
Career
Born Charles Morgan Royce, Chuck rose to become part of the management of the Pennsylvania Mutual Fund. He changed the name to Royce and Associates after almost 3 decades of success. He has enjoyed a long tenure of active mutual fund management. Many analysts describe as a small-company stock pioneer with great achievement.
He changed his focus towards small-cap stocks after assuming management of the Pennsylvania Mutual Fund. It is this new direction that caused the free cash flow to survive down-market and other difficult economic times. This emphasis on downside became one of the hallmarks of the firm’s investment approach.
He later expanded the portfolio line-up and expanded its investment staff and it became fully owned. With an independent company, he introduced global and international small-cap mutual fund portfolios. Today, the firm has 30 investment professionals.
In 2014, Mr. Royce passed his position to Co-Chief Investment officer Christopher D. Clark. He had held the position of president of the firm for 42 years since its purchase in 1972.
Investment Approach
Chuck insisted on his unique follow-up approach to detail. The company uses a disciplined value-oriented approach to investment. The portfolio managers often study mainly at balance sheet strength, cash flow characteristics, as well as returns on invested capital when choosing stocks.
The company is based on longevity of performance ratings as opposed to relative ratings. This approach has driven the company to withstand the many years of the changing tides of economic times. His secret has proven helpful to stand the most difficult of economic times.
Performance
The performance of his company depended on the business philosophy he employed. He retained his approach to measure and determination of the rates of performance in his company. His leadership of the Royce Funds began in 1972 and through 42 years he accrued approximately $2 billion in total assets. His management style was adopted by the new president who has been in office for 4 years now. When Chuck stepped down for a new era, it was on an incline. He was celebrated by the staff as an influential figure who will always be adored.
Core Values and Business Culture
Royce & Associates is a company based on the ethics of business because Chuck believed in authenticity, transparency, and openness in business. He was committed to serving his staff and overall business activity in complete honesty and openness. Other managers followed suit and made it a tradition of the company, which is its reputation to date. He successfully and satisfactorily served as the investment adviser to the rest of the Royce portfolios.
Family and Personal Life
There is little known about his personal life and family. He chose to keep it private and out of the public domain. We hope to find out more about how he led his personal life but it will depend with his decision to grant this permission.
This is typical of some successful business people as they strive to protect their loved ones from public scrutiny and exposure. It has both its advantages and downsides but still up to the person’s choice. Keeping family private when leading a high profile life for many years is also not an easy task as we may assume. There must be excessive effort put towards keeping the personal life a secret.
Management strategy
Chuck retained the use of a bottom-up approach in his business. This is a strict and orderly, value-oriented approach, which pays close to risk and company basics. Mr. Royce has proven undoubtedly that he is one of the pioneers of small-cap investing using his management style.
He has over 50 years of experience in the field and best placed to help new up and coming investors with their planning and preparation. Forbe’s decision to profile his achievements was based on consistent high performance, which is incomparable and unparalleled by many competitors.