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British asset manager Laffer plans job cuts across its businesses after poor investment results last year as the industry battles rising costs and pressure on profits.
The London-based boutique, which employs about 330 people and was co-founded by billionaire philanthropist Jonathan Laffer, is cutting about 20 positions, including in its private client and risk teams.
The company says: “We have made the necessary changes to best serve our existing and new customers in a rapidly evolving industry environment. . . . There are no changes to our senior management or investment leadership.”
The job cuts come after a difficult period for the company, with Laffer himself calling 2023 a “low” year in a letter to investors. “So much of what was supposed to go down went up, and so much of what was supposed to go up went down,” he said.
He added: “We certainly made some mistakes last year, but it made us take a fresh look at what we were doing.”
The company's fund managers take a bearish view of the stock market, taking a defensive stance by investing in long-term inflation-linked bonds and betting on growth stocks through short positions.
Jonathan Laffer said that inflation “will ultimately prove to be a semi-permanent condition in the West,” but the firm's strategy has affected the fund's performance amid recent stock market gains. It has become a burden.
Its flagship fund, the Total Return Fund, which manages £2.3 billion, is down 6.4% in the past year, while the FTSE All Share Index is up more than 2.5%, according to the firm's fact sheet. According to Citywire, the company has achieved a 46.5% total return over 10 years, compared to an average of 32.5% for its peers.
The company's £1 billion investment trust also had a tough year in 2023, with its managers saying last year was “the worst in Laffer Investment Company's history”.
Mr Laffer, who manages around £22bn for institutional investors and private clients, was in the spotlight last year over his relationship with fund manager Crispin O'Day, who is facing allegations of assault and harassment from women. strongly denies this.
O'Day was one of Laffer's early backers, who initially used O'Day Asset Management's offices in Upper Grosvenor Street, Mayfair, London. Jonathan Laffer was a director of O'Day Asset Management until 2002.
As part of the company's succession plan, Mr. Laffer restructured the business last year, saying at the time that it was preparing for the founder's eventual retirement.
As a result of this reorganization, Ruffer Management Limited (the original investors, including Ruffer's founders and some members of Odey's family, derive their income through Ruffer Management Limited) will no longer be the controlling entity of the Ruffer Limited Partnership. I meant it. “There was no relationship between Crispin O'Day and the management or supervision of Laffer LLP,” Laffer said at the time.
