Home / Profiles / ‘Genuine heretics’: how ‘safety first’ pays off for Ruffer

‘Genuine heretics’: how ‘safety first’ pays off for Ruffer


All fund managers like to talk about protecting capital. At Ruffer Investment Management, it is a more embedded philosophy than most.

The firm was founded by Jonathan Ruffer on the principle that “investors like making money, but they hate losing money more.” Ruffer is built to preserve capital for the long-term:  centred on “absolute-return investing with a focus on downside protection.”

It’s a philosophy that the firm’s investment director, Alex Lennard, who joined Ruffer in 2006 after graduating from Exeter University with an honours degree in economics and finance, finds highly congenial.

“My family has a very long history of blowing themselves up ; over-extension and losing everything is a sort of a Lennard family trait,” he says. “So, for me – trying to fight my family background – the idea of capital preservation has always resonated particularly strongly. Personally, I don’t particularly like taking on a lot of personal debt. I like the idea of putting capital preservation first, and then, if you look after the downside, seeing what you can do on the return side.”

This flows into an investment strategy that has two simple objectives: firstly, not to lose money in any 12-month rolling period and secondly, to achieve positive returns in all market conditions. Ruffer’s aim is to build an “all-weather” portfolio of assets that will enable it to deliver on its objectives, regardless of what is happening in the markets or the economy.

That appealed to Lennard immediately when he arrived at Ruffer. But how the strategy is applied day-to-day was even more interesting. “From a philosophical standpoint, the thing that ensures you want to stay at Ruffer is that the intellectual challenge is massive. We are quite an academic organization, where people are encouraged to challenge, to debate, and to have views,” he says.

“My academic background is pretty conventional – I did economics, but at Ruffer, rather than being surrounded by lots of other people with economics degrees, we’ve got historians, we’ve people with modern languages backgrounds, we’ve got philosophers. We very firmly believe that that’s how you get different ways of thinking, and that’s something that makes the process more effective, and more interesting. The idea of having people that can think differently, and are prepared to express those differences of opinion, is something that we’ve always looked to do,” Lennard says.

“Right from the outset, with Jonathan, Ruffer has always enjoyed having younger people, and genuine heretics, around the table, because that’s when you actually get some pretty good debates. Otherwise you just get people who all think the same way, which is pointless.”

In fact, Lennard thinks intellectual diversity will only grow in importance. “We think the world is heading into a new regime, and the fact is that everyone who’s got a Masters in Finance has learned everything they know from the last 40 years. So, however many finance degrees you’ve got, it’s not going to necessarily help you.”

In a firm built on intellectual debate, Lennard says competitiveness is also valued – and the ability to lose gracefully. “Henry (Maxey), our CIO, says he wants people who are willing to be brave, in terms of both their thought processes and their implementation of it. That means, effectively, the licence to make mistakes, which is really the only way you learn.

“That is tempered by the fact that we are always looking for assets that offer asymmetric return profiles, combining them to build a portfolio that will make relentless progress over the long term. The way that we think about portfolios enables you to make mistakes, because you’re always looking at offsets; so, even if you’re making a mistake, you should hopefully have something else on the other side of the portfolio, that’s allowing that mistake to be offset.”

Away from work, Lennard and his teacher wife Emma have two children under the age of six, which he says supplies all he could want in terms of work-life balance. “Time away from work tends to be very family-focused. Neither my wife nor I bring work home – although obviously, we have had to over the last two years – and weekends are very full-on with the children.

“In former times, I played football a lot (he is a Manchester United fan, having been beguiled by Eric Cantona), but I find that with children the ages of mine, I say ‘used to’ quite a lot. I used to play a lot of tennis, I used to ski a lot, and I used to play football. When I have time, I still play football, and I do sneak to the gym whenever I can. I suppose I might be able to get back to skiing and tennis in time,” he laughs.

Print Article

Why taming the inflation tiger will be harder than the 1970s

Inflation is making a latter day comeback, and a financial system “sanitized by 15 years of free money” is totally unprepared. It’s time, once again, for tough medicine. Inflation hasn’t been this high in 40 years, but investors have become convinced that central banks can still tamp it down it with relative ease – a…

Lachlan Maddock | 27th May 2022 | More
Bragg offers a super manifesto (from opposition)

One of the Coalition’s few surviving  “super soldiers”, Andrew Bragg has called on his party to go further down the route of “flexibilising” super – if not abolishing it completely. Senator Andrew Bragg finds himself in a curious position following Labor’s election win. He’s one of the few super partisans to survive the teal clean…

Lachlan Maddock | 27th May 2022 | More
Appen left at the altar. Market heads lower. Good week continues for US markets.

Appen left at the altar A bizarre blink-and-you-missed takeover approach came and seemingly went for one of the local market’s tech leaders Appen, which develops the datasets for machine learning and artificial intelligence. Canadian company Telus International sprang a $9.50 a share bid on the company, which said it would talk to Telus to try to…

Drew Meredith | 27th May 2022 | More
News and OneVue go live with brightday
Alec Law | 11th Jan 2015 | More
Perrignon off to HK with Credit Suisse
Alec Law | 22nd Dec 2013 | More
Sports betting as a new asset class
Alec Law | 3rd Jul 2016 | More
BlackRock ahead of consensus with bullish view
Alec Law | 14th Jan 2017 | More
Statewide seeds bespoke Apostle fund
Lachlan Maddock | 23rd Mar 2022 | More
UniSuper’s VC foray a sign of things to come
Lachlan Maddock | 25th Mar 2022 | More