The day after a severe market rout caused by China's 'Black Monday', shares in currency manager Record (REC) plunged another 15 per cent on news that the group had lost a $2.8bn (£1.8bn) high-margin bespoke 'tactical' mandate. With the shares now some way below the price at which we made Record our Contrarian Tip of the Year, we think a buying opportunity has emerged.
The mandate Record has lost was a one-off. It was based on the currency manager using its risk-management expertise to implement a client's own strategy - all Record's other business is based on it providing clients with is own hedging or returns strategies. Whatever happened to the 'tactical' mandate on 'Black Monday' was enough for the client to take its money and run. When in March Record originally announced the $1.75bn bespoke 'tactical' mandate increase, it explicitly warned investors it may only prove a temporary bump.
