British wealth manager Ruffer opens office in New York

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British asset manager Ruffer is opening its first US office, aiming to expand rapidly in an economy expected to face a recession and further stock market turmoil this year.

Founded three decades ago, Ruffer it typically caters to private clients, charities, family offices and institutions in the UK, Europe and Australia, but has amassed nearly $1 billion in assets from US pensions, foundations and donations.

The company, which is based a few minutes’ walk from Buckingham Palace and will open its American office in New York, aims to at least quadruple the amount it manages for American clients over the next few years.

Portfolio managers at Ruffer, which has more than $30 billion in assets under management, have held meetings with US institutions in recent weeks to outline their strategy, which calls for 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%, as the firm expects the stock will be among the assets investors will rush to sell as financial markets face new strains. .

“If there’s a liquidity crunch and people can’t sell private credit or corporate bonds, they will sell stock,” said Jenny Renton, investment director at Ruffer. She said the company expected a recession in several major economies this year, including the United States.

Over the long term, Ruffer expects inflation to remain elevated and interest rates to be more volatile, Renton said, noting that he has held inflation-linked bonds and gold as a hedge. Nearly a third of the UK asset manager’s portfolio consists of inflation-linked bonds, including US and UK government bonds, as well as gold.

The firm also uses derivatives, including credit default swaps, as protection should financial markets come under renewed pressure from interest rates. “We are now using investment strategies [such as derivatives] for a liquidation event,” Renton said.

Co-founded by multi-millionaire Jonathan Ruffer, the firm successfully gambled on bitcoin last year, but Renton said he was unlikely to invest in cryptocurrencies again anytime soon.

The U.S. expansion comes as the firm, which charges no performance fees, continues succession planning for its founder’s retirement. A recent restructuring means the wealth manager is run by its 56 partners, rather than its three co-founders: Jonathan Ruffer, Robert Shirley and Jane Tufnell.

Ruffer said in a statement: “To support long-term succession planning, Jonathan is handing over control of the business to his working partners. This helps secure Ruffer’s long-term future as an independent private partnership.”