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British multi-millionaire Jonathan Ruffer has admitted his eponymous investment boutique has “failed to meet its targets” for customers for the second year in a row by delivering less than cashback.
Ruffer, who co-founded Ruffer Investment Management three decades ago, said in his annual review that the £20bn company’s strategy lagged behind the cash benchmarks of 2024 and 2023.
The philanthropist, who also chairs the company, said his investment approach had suffered because of the belief that the US stock market would fall and that the Japanese yen would strengthen against the dollar, misplacing Ruffer’s funds.
The S&P 500 is up more than a fifth in 2024, while Ruffer’s flagship Total Return fund returned 4.4 percent last year to the end of September, compared with the UK bank rate of 5.25 percent, according to the firm.
“We were ready for a dislocation when the S&P was quite low: it was wrong, but not perverse – the nature of valuation bubbles is that they kind of offer subliminal validation on the journey to the moon,” Ruffer said in his annual update.
“The yen continued to fall, and exporters rose. If we had put, say, 4 percent of the portfolio into these equity offsets, we could have made solid gains on a regular basis. . . we did not do this because we were particularly concerned about the dangers of stocks as an asset class.
“Omitting that one mistake would not, by itself, have saved our performance in terms of cash returns, but it would have helped significantly.”
His comments come after he received a share of the firm’s payout of £89.8m for the year to the end of March 2024 — roughly £2m for each of the 44 partners — down from £95m the previous year. Operating profit fell 14 per cent over the year to £119m.
Ruffer’s flagship Total Return fund aims to deliver “consistent positive returns, regardless of the performance of financial markets”. But the strategy returned a negative 3.8 percent in 2023.
The boutique fund underperformed equity markets, taking defensive positions in long-term inflation-linked bonds while betting against rising stocks through short positions.
But Ruffer said the company would maintain its investment stance. “We continue the clash on the bull tack; those assets we choose feel like they have good days followed by bad weeks.
“It’s no coincidence that we still have a portfolio that can take full advantage of a systemic shock of a certain size. Why can it be said without arrogance? It refers in three words to the price level on the main US stock market: S&P at 6000.”
Investment company last year cut out about 20 stakes of its 330 employees at the time, including positions in the private client and risk teams.
