Institutional Investor's Alpha Magazine - April 2008 - (Page 5)

Longs Divided They Stand & Shorts W hat’s the price of access to the White House? Hard to say for certain, but if wealth means inﬂuence and if inﬂuence is the threshold to power, then the hedge fund industry is doing its part to get in the door. Hedge fund employees have given just over $3.9 million to presidential candidates this election cycle, with more than two thirds going to Democrats. That’s according to data from the Center for Responsive Politics, the nonpartisan group that tracks money in politics. (For a breakdown of the top hedge fund presidential primary contributors, see page 68.) Raw numbers aside, the hedge fund set seems every bit as divided as the citizenry, and loyalties defy the bounds of history and friendship. Eric Mindich, founder of New York–based Eton Park Capital Management, for instance, is a passionate supporter of Democratic Senator Barack Obama, though Mindich was schooled on the famed Goldman Sachs arbitrage desk run by Robert Rubin, who was former president Bill Clinton’s Treasury secretary. Senator John McCain, the Republican nominee, has received less than 10 percent of all hedge fund donations ($267,000). But fans include Raymond Dalio, founder of Bridgewater Associates in Westport, Connecticut, and Louis Bacon, a staunch Republican and founder of Moore Capital Management in New York. Not all Republicans are toeing the McCain line. Kenneth Griffin, founder of Chicago’s Citadel Investment Group, and his wife, Anne Dias-Grifﬁn (also a hedge fund manager), have each given the maximum $4,600 to Obama, their hometown hero. (Campaigns can accept direct payments from individual donors only.) Obama has got $720,000 altogether from the hedge fund industry. Orin Kramer, a New York hedge fund manager who is an important backer of Obama’s, says excitement over the Illinois senator is rooted in “dissatisfaction with the political culture. “People enlisted with Senator Obama feel as if they are part of a historic effort to change that culture, and hedge fund managers are apparently not immune from that impulse,” Kramer says. Marc Lasry of Avenue Capital Group, another former Rubin arbitrageur, is a well-known fundraiser for New York Senator Hillary Clinton. (Chelsea Clinton is an analyst at Avenue.) The employees at San Francisco– based Farallon Capital Management have donated $119,900 to Clinton, more than any other hedge fund. And she leads the pack in hedge fund contributions, with $802,000. Farallon founder Thomas Steyer last year helped defeat a Republican initiative to change Illustration by Joshua Gorchov for Alpha electoral college allocations in California. Among all hedge fund givers, Stamford, Connecticut– based SAC Capital Partners is the leader. Its employees have donated $352,250, almost all of which went to Connecticut Senator Christopher Dodd. He’s no longer in the race but still chairs the powerful Senate Banking Committee. In fact, three quarters of all hedge fund presidential donations have gone to Democrats. — Imogen Rose-Smith ShortStop L ondon thrives on trading-ﬂoor chatter, but shortsellers who proﬁted on March 19 after spreading malicious rumors about a liquidity crisis at Britain’s largest mortgage lender, HBOS, may think twice before they do so again. That day Sally Dewar, head of wholesale Big givers, from left, include Kenneth Grifﬁn of Citadel Investment Group, Raymond Dalio of Bridgewater Associates and Thomas Steyer of Farallon Capital Management. APRIL 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 5

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - April 2008

Institutional Investor's Alpha Magazine - April 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Here to Eternity The Good Guys: Voice of Hope Cover Story: The Kings of Cash Where the Money Is Into the Light Interview: Proceeding with Caution Strategies: A Convenient Truth Alpha Bytes: Village Voice Unhedged: Commentary: No Time for Complacency

Institutional Investor's Alpha Magazine - April 2008

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