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British millionaire Jonathan Rover has admitted his eponymous investment shop has “failed to meet its targets” for clients for the second year in a row by offering lower returns than cash.
Ruffer, who co-founded Ruffer Investment Management three decades ago, said in his annual review that the £20bn company's strategy had defaulted on its cash benchmark in 2024 and 2023.
The philanthropist, who also chairs the company, said its investment approach suffered as a result of the belief that the US stock market would fall and the Japanese yen would rise against the dollar, hurting Rover's finances.
The S&P 500 is up by more than a fifth in 2024, while Rovere's flagship total return fund earned 4.4 per cent last year to the end of September, compared with the UK bank interest rate of 5.25 per cent, according to the firm.
“We were in a position to be upset when the S&P was somewhat lower: that was a mistake, but it wasn't aberrations — the nature of bubble ratings is that they somehow provide subconscious validation in flight,” Rover said in his annual update. Towards the moon.”
He continued: “The yen continued to decline and exporters’ prices rose. If we had put, say, 4 percent of the portfolio into this stock compensation, we could have reaped strong gains on a regular basis. . . But we didn't, because we were particularly concerned about the risks posed by stocks as an asset class.
“Omitting this single error would not have saved our performance in terms of additional cash returns, but it would have helped significantly.”
His comments come after he received a share of the firm's £89.8m payout for the year to the end of March 2024 – the equivalent of around £2m for each of its 44 partners – down from £95m the previous year. Operating profits fell by 14 per cent during the year to £119 million.
Rovere'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 investment fund was bearish on equity markets, taking defensive positions in long-term inflation-linked bonds while betting against growth stocks through short positions.
But Rover said the company would maintain its investment position. “We continue to skirmish on the bull run; those assets we select seem to have good days coupled with bad weeks.
“It is no coincidence that we still have a portfolio that can take full advantage of a systemic shock of some magnitude. Why would one say that without arrogance? It is about in three words the level of prices in the main US stock market: the S&P at 6,000.
Investment company last year Cut about 20 roles From its headcount of 330 at the time, including positions in its private clients and risk teams.
