09 October 2015

Financial Times: Cameron woos Merkel amid fears hedge funds will back Brexit push

David Cameron urged Angela Merkel to help keep Britain in the EU, amid concerns in senior Tory circles that many hedge fund chiefs will throw their financial muscle behind the “Brexit” campaign.

Mr Cameron’s allies fear that the longer the talks drag on, the easier it will be for Brexit campaigners to make the political running, partly funded by eurosceptic hedge fund executives.

While several hedge fund managers have been big donors to the Tories, Crispin Odey, a leading hedge fund manager, supports the “Vote Leave” Brexit campaign, launched on Thursday night. “The hedge funds are resolutely anti-EU,” said one leader of the pro-EU campaign.

Mr Cameron expects much of corporate Britain to support Britain’s continued membership of the EU.

The group lobbying for Britain to stay in - which hopes to be designated the official campaign - is bringing in corporate heavy hitters, announcing on Friday night that it will be chaired by the Conservative peer Lord Rose, the man who turned around the fortunes of Marks and Spencer during his spell in charge of the retailer.

The cross-party “In” campaign, already launched, features New Labour grandees including Lord Sainsbury, its biggest donor, Lord Mandelson and the public relations chief Roland Rudd.

But allies say Mr Cameron will have to deliver a good renegotiation to win over many in London’s hedge fund sector.

The sector’s hostility partly stems from the battle over a post-financial crisis Brussels directive that brought hedge funds and private equity groups under direct regulation for the first time.

One prominent hedge fund manager said potential donors to the Brexit campaign were not yet decided and that few would voice their views publicly. “There is a division of opinion over the referendum,” the manager said. [...]

The In camp recognises it needs to step up fundraising to avoid being outspent during the phoney war. “We are confident that hedge funds and many other financial firms will support ‘Vote Leave, take control’,” said Paul Stephenson, a spokesman for the campaign group.

Amid claims and counter claims, Andrew Tyrie, chairman of the Commons Treasury committee, has announced that his body will investigate the costs and benefits of EU membership.

Full article in Financial Times (subscription required)

© Financial Times