UK asset manager Ruffer is opening its first office in the US, aiming to rapidly expand in an economy it expects to face a recession and further stock market turbulence this year.
Established three decades ago, Ruffer has typically catered to private clients, charities, family offices and institutions in the UK, Europe and Australia but has amassed almost $1bn in assets from US pensions, foundations and endowments.
The company, which is based just a few minutes’ walk from Buckingham Palace and will open its US office in New York, is aiming to at least quadruple the sum it manages for American clients over the next few years.
Portfolio managers at Ruffer, which has more than $30bn in assets under management, have held meetings with US institutions in recent weeks to lay out their strategy, which anticipates that investors will face a liquidity crunch as interest rates remain high.
As a result, Ruffer’s overall portfolio has its lowest ever exposure to global equities at 14 per cent, as the firm anticipates stocks will be among the assets investors will rush to sell when financial markets face new strains.
“If there is a liquidity crunch, and people can’t sell private credit or corporate bonds, they’ll sell equities,” said Jenny Renton, investment director at Ruffer. She said the firm expected a recession in several big economies this year, including the US.
Over the longer term, Ruffer expects inflation to remain high and interest rates to be more volatile, Renton said, pointing out that it held inflation-linked bonds and gold as a hedge. Almost a third of the UK asset manager’s portfolio is in inflation-linked bonds, including US and UK government debt, as well as gold.
The firm is also using derivatives, including credit default swaps, as protection in the event financial markets come under renewed pressure from interest rates. “We’re now using investment strategies [such as derivatives] for a liquidation event,” said Renton.
Co-founded by multimillionaire Jonathan Ruffer, the firm made a successful bet on bitcoin last year, but Renton said it was unlikely to invest in cryptocurrencies again any time soon.
The expansion into the US comes as the firm, which does not charge performance fees, continues succession plans for the retirement of its founder. A recent restructuring means the asset manager is run by its 56 partners, rather than its three co-founders — Jonathan Ruffer, Robert Shirley and Jane Tufnell.
In a statement Ruffer said: “To support long-term succession planning, Jonathan is handing control of the firm to its working partners. This helps secure Ruffer’s long-term future as an independent private partnership.”
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