Tuesday, 22 July 2014
Last updated 1 hour ago
May 31 2012 | 11:30am ET
Deep pocketed donors have long played a role in national politics, but perhaps no group has become more influential in this election cycle than the financial titans known as asset managers.
In this series, which will appear over the next two weeks, we take a close look at hedge fund managers, private equity executives and their less glamorous but equally powerful Wall Street counterparts to discover who is supporting Romney and who is backing Obama—why, and for how much.
Chris DeMuth, Rangeley Capital
For Rangeley Capital's Chris DeMuth, his colleagues' abandonment of President Barack Obama—after the hedge fund industry overwhelmingly backed his election in 2008—makes sense, given what they do for a living.
"The work of hedge funds involves dispassionate analysis—applying logic to facts in order to profit from mispricing in the capital markets," DeMuth told FINalternatives. "Much of the initial enthusiasm for Obama came from a hope that he would be an analytical problem solver. However, despite Obama’s many skills, when politicians—or investors—try to do too many things at the same time, they tend to do all of them badly."
"Romney’s focus on a more limited role for government is balanced with his capacity to execute those legitimate functions well."
For his part, DeMuth has invested in several Republican campaigns close to his New Canaan, Conn., home, including Tea Party-backed Congressional candidate Justin Bernier and Massachusetts Sen. Scott Brown. DeMuth and his partners at Rangeley have also focused on local philanthropic efforts at the Rangeley Capital Community Fund, which receives 10% of the firm's general partnership profits.
RCCF "supports educational and health initiatives that prepare children to be ready to compete effectively in our society by the time that they reach adulthood," including charter schools, DeMuth said. Echoing his take on the hedge fund industry's turn on President Obama, DeMuth, never himself a supporter of the president, added that RCCF approaches "philanthropy in a similar manner to how we approach investing."
"We seek to invest in programs that are cost-efficient with measurable results but that remain overlooked by other sources of fund," he said. "Our giving will always be allocated and sized by applying an analytically rigorous framework."
Money Managers And Their Donation Dollars
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…