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These hedge funders are dismayed at the presidential race
There's no major candidate who supports the financial industry.
These hedge funders are dismayed at the presidential race
There’s
much talk of politics at the Milken Institute’s annual gathering of
business leaders in Beverly Hills. And a lot of head-scratching about
the state of the presidential race, especially the surprise success of
the leading Republican presidential candidate, Donald Trump.
“I’m a little confused,” hedge fund titan Steven Cohen of Point 72 Asset Management responded when asked on a panel discussion
what he thought of the presidential campaign. “I’m not sure what to do
and as the campaign goes on, I’m hoping it maybe reveals itself in one
direction or another.”
Cohen
donated a small amount of money to Chris Christie’s campaign, but like
many members of the business establishment, he now finds himself in the
perplexing position of having no pro-business candidate to support.
Business leaders typically prefer Republicans, of course, and former
Florida Gov. Jeb Bush was corporate America’s early favorite, raising
more than $150 million before he dropped out.
Florida
Sen. Marco Rubio then became the candidate of big business, but he
dropped out too, after raising $110 million. Scott Walker, Chris
Christie and Carly Fiorina all had a smattering of business support –
and they’re all gone, as well. In total, those five pro-business
candidates raised more than $300 million, all for naught.
You
might think Trump, a billionaire developer, would enjoy Wall Street
backing. But he has said hedge fund managers are “getting away with
murder” on account of favorable tax breaks, and has pledged to roll back
at least one loophole that lowers the tax bite for private-equity funds
and other financiers. As for Democrats, Hillary Clinton used to
represent the financial industry’s interests as a senator from New York,
but her rival Bernie Sanders’ relentless bashing of big banks has drawn
Clinton to the left and prompted her to insist that she, too, will
clamp down on Wall Street.
The
black hole into which millions in campaign donations has disappeared
this year has led some big donors – most notably, Republican casino
magnate Sheldon Adelson – to sit on their money until the general
election. Some may sit on it all the way through November. Cliff Asness,
co-founder of the hedge fund AQR Capital Management, gave more than $1
million to Rubio’s campaign, but when asked at the Milken conference
whether he would support Trump or Clinton in the general election, he
answered, “Hashtag neveranyofthem. I’m deeply disappointed with what are
the likely two choices. I think I’m flipping a coin.”
The
uproarious presidential race has even seeped into hedge fund dealings
with overseas clients. “The world’s watching,” said Neil Chriss, founder
of Hutchin Hill Capital, who has donated small amounts to Hillary
Clinton’s campaign. “One investor asked me – I was shocked – who I’m
voting for. Really? Do I have to answer this? I never heard such a
thing.”
While policies may
differ, there’s one thing the Democratic and Republican nominees seem
likely to agree on. “At least they have a bipartisan hate of hedge
funds,” said Asness. If not loved, maybe hedge funds can be feared.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnew
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