Kevin Smith and Sophie Burke-Murphy, Investment Managers at Ruffer, explain why their firm favours an offsetting balance of growth and protective assets to help clients weather market storms and achieve robust returns.
What is Ruffer’s history and how does it stand now in terms of its UK presence and client base?
Sophie: We have been looking after our clients’ wealth since 1994 and now have over 250 people working for us, with offices in London, Edinburgh, Hong Kong and Guernsey. We have over £22 billion of assets under management, which span across the retail, intermediary, institutional and charities space.
Kevin: We have a single investment approach for all of our clients, whether UK-based or international, which we have followed since we were founded. This focuses on delivering positive returns regardless of how financial markets perform.
How would you describe Ruffer’s investment ethos and risk management approach? Does the firm have expertise in any particular areas of investment?
Kevin: Our philosophy is based on the belief that most people like making money but hate losing it more. We focus on capital preservation and prudent growth, not chasing short-term fads or trends. You can never be certain about the future, so we always try to maintain an offsetting balance of ‘growth’ and ‘protective’ assets. Protective assets should perform well in a market downturn and defend the portfolio value, while growth assets should deliver good returns in favourable market conditions.
Sophie: In addition, we conduct our own research in house and don’t invest in third-party funds which can increase costs. We are able to actively manage our investments and operate freely, without the straightjacket of market benchmarks. Since we began in 1994, our investment process hasn’t changed and we have delivered solid returns well ahead of cash and UK equities with lower volatility. More importantly, it has protected our clients from market crashes, including the bursting of the dot.com bubble and the credit crisis.
Who is the “typical” client of Ruffer? What is their stage of life and what are they trying to achieve with their wealth?
Sophie: Most of Ruffer’s clients are individuals and families, who are looking to preserve and grow their wealth over the long term. They come to us at all stages of their life, from savings in a Junior ISA through to managing retirement. We also manage money for charities and institutions, and have a growing international client base too.
How does Ruffer go about devising investment strategies and building portfolios which suit each individual client’s risk-profile and financial goals?
Sophie: When we meet a potential client, we want to make sure that their objectives and expectations are in line with our own. We understand that Ruffer’s single investment approach, focused on capital preservation, is not suitable for everyone and as such, we don’t try to be all things to all people. However, we work hard at the outset to understand a client’s potential wants and needs.
Kevin: When we take on a client, their funds are invested according to the Ruffer strategy. The asset allocation is set by Henry Maxey (Chief Investment Officer), Jonathan Ruffer (Chairman) and Jon Dye (Head of Research). Each individual manager then uses their own discretion to build their clients’ portfolios within these parameters. We can accommodate for specific ethical concerns or restrictions, but essentially we follow the same approach for all our clients.
How would you describe Ruffer’s approach to servicing clients?
Kevin: How many times have you heard businesses say that they ‘put their clients first’? Yet somehow within the financial service industry, this never seems to translate into the necessary behaviour and action. Jonathan Ruffer set up this business precisely because he felt that private clients were being poorly served by the investment management industry, which provided a ‘product’ rather than a ‘service’. We think that providing a good service to clients and putting their interests first is essential to building trust. This is the ultimate aim, which may take time to achieve, but we believe it is the true test of a job well done.
Sophie: Each client at Ruffer has direct access to a dedicated investment manager – which supports what Kevin said. They are responsible for investing their clients’ money according to the Ruffer strategy, as well as providing a primary point of contact, removing any barriers between the client and individual investing their monies. All of our investment managers are involved in the investment process, which we think is a strength as it makes them more accountable for their actions. They are supported by a small team, which deliberately has a very open structure so there is always someone on hand who knows what is going on in your portfolio and is able to answer any questions, whether that is in person, by telephone or email. None of our investment managers are incentivised to grow assets under management, so they are genuinely able to put the clients’ interests first.
How does Ruffer help clients engage more effectively with the management of their wealth?
Kevin: Our clients are at the very centre of everything we do. We are a service business and like to meet regularly with our clients or have an ongoing dialogue. We are very keen that our clients fully understand our investment approach and the assets that we buy on their behalf. To this end, we are more than happy to take as much time as is necessary to explain and discuss the strategy in detail.
Sophie: In terms of education and research this is mainly covered through our direct interaction with our clients, as Kevin highlighted. Additionally, we also run events and topical seminars at Ruffer to inform and educate those clients who are interested.
What else is distinctive about Ruffer, either in terms of its investment process, corporate ethos or manner of servicing clients?
Sophie: We recognise that giving money to an investment manager is a huge act of faith and therefore demands the highest level of responsibility, which we take very seriously. Jonathan Ruffer sums this up well with the metaphor of juggling grenades to demonstrate the gravity of our responsibility to our clients. Amid the spectacle of flashing screens and breaking news, people often forget that their mistakes can really hurt clients and impact their lifestyles.
Kevin: The business is set up as a partnership with a deliberately flat structure both culturally and organisationally. This structure helps to embed a focus on clients throughout the firm, rather than just among those who serve the clients directly. Being a partnership also means we are free to make our own decisions and are not subject to outside influence. This ensures the alignment between our clients’ and our interests, in that success or failure is driven entirely by our investment performance and client service.
If you would like to start a conversation with Ruffer, please get in touch with the findaWEALTHMANAGER.com team HERE.