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UK multimillionaire Jonathan Ruffer has admitted that his eponymous investment boutique has “failed to meet its objectives” for customers for a second year in a row by delivering less than returns on cash.
Ruffer, who co-founded Ruffer Investment Management three decades ago, said in his annual review that the £20bn firm’s strategy had lagged behind its cash benchmark in 2024 and 2023.
The philanthropist, who also chairs the firm, said that its investment approach had suffered as a result of the belief that the US stock market would fall and that the Japanese yen would strengthen against the dollar, wrongfooting Ruffer’s funds.
The S&P 500 rose by more than a fifth in 2024, while Ruffer’s flagship Total Return fund delivered 4.4 per cent last year to the end of September, compared with the UK bank rate 5.25 per cent, according to the firm.
“We were positioned for a dislocation when the S&P was rather lower: that was wrong, but not perverse — the nature of bubble valuations is that they somehow offer subliminal validation on the journey towards the moon,” Ruffer said in his annual update.
“The yen continued down and the exporters went up. Had we put, say, 4 per cent of the portfolio into these equity offsets, we could have regularly harvested solid gains . . . we didn’t do it, because we were particularly concerned about the danger of equities as an asset class.
“The omission of that single error would not, single-handed, have rescued our performance as regards cash-plus returns, but it would have helped considerably.”
His comments come after he received a share in the firm’s £89.8mn payout for the year to the end of March 2024 — equating to about £2mn for each of its 44 partners — down from £95mn the previous year. Operating profit fell 14 per cent over the year to £119mn.
Ruffer’s flagship Total Return fund has the aim of delivering “consistent positive returns, regardless of how the financial markets perform”. But the strategy returned a negative 3.8 per cent in 2023.
The fund boutique has been bearish on equity markets, taking defensive positions in long-dated, inflation linked bonds while betting against growth stocks through short positions.
But Ruffer said the company would retain its investment stance. “We continue to skirmish on the bull tack; those assets that we pick feel like they have good days accompanied by bad weeks.
“It is not by accident that we still have a portfolio which can take full advantage of a system shock of some magnitude. Why can one say that, without arrogance? It relates in three words to the price level of the main American equity market: the S&P at 6,000.”
The investment firm last year cut about 20 roles from its 330-strong headcount at the time, including positions in its private client and risk teams.
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