Bob Rodriguez on the Dangers in Today’s Markets
Bob Rodriguez, CFA, is the managing partner and chief executive officer of First Pacific Advisors. Based in Los Angeles, FPA manages $19 billion across five equity strategies and one fixed-income strategy. Bob joined the firm in 1983. He serves in a supporting role to the research and portfolio management teams for the Small/Mid-Cap Absolute Value and Absolute Fixed Income strategies.
I spoke with Bob on February 14.
You’ve handed off the management of the FPA Capital Fund and the FPA New Income Fund to others. What are your new responsibilities, and do you miss running a fund?
My responsibilities are as CEO and managing director, as well as an advisor to the funds and product groups I formerly managed. The firm has grown rapidly over the last several years. We expanded the management committee by the addition of Steven Romick in early 2009, who manages the FPA Crescent Fund. That was in preparation for my sabbatical in 2010.
I think more about larger issues. I pester my successors with comments and suggestions, but I am not in what I would call the security-specific selection arena, other than if I see them doing something in an area where I have some knowledge, I will provide free advice – which is worth about as much as I charge.
Do I miss managing money? Not particularly. I look at the time that I was off on my sabbatical and came back, and nothing has really changed. There was a major financial collapse with a desperate need for liquidity.
I have said to pension funds that you never know the value of liquidity until you need it or don't have access to it. They tended to get a sense of that in the credit collapse. Here in 2011 and 2012, memories are exceedingly short, and the bad behaviors that I saw before are alive and well today. It is a very difficult environment to manage money, particularly with the high-volatility, risk-on/risk-off environment that we are in.
Continue reading the interview.