Monday, May 27, 2024

Analysis: Ken Griffin could back Paul Marshall’s Telegraph bid

Photo by Adeolu Eletu on Unsplash

The race to acquire Telegraph Media Group, pillar of the UK’s right-wing media establishment, has taken a new twist with the late entry of Citadel founder Ken Griffin.

His reported backing for a consortium led by Paul Marshall, co-founder of Marshall Wace, ahead of a likely auction for the storied masthead this month, could be a game-changer.

Griffin’s vast wealth is big enough to potentially blow any of the other individuals exploring bids out of the water.

But the Marshall consortium is significant in ways beyond cold hard cash. A successful bid could usher in the era of hedge fund manager media proprietor.

Marshall has made a start, funding the right-wing UnHerd website, positioned as a challenger to The Spectator, and GB News, the TV station with aspirations of rocking the establishment.

A Griffin/Marshall-backed Telegraph – which already boasts immense influence in British Conservative circles and a growing digital operation to make up for its dwindling print readership – would be a different order of magnitude.

Funded properly, it has the capacity to be a vast and influential media force in right-wing politics on both sides of the Atlantic. For Griffin, previously a Republican donor but who has grown tired of Donald Trump (calling him a “three-time loser”), it is likely a very appealing notion.

Whether Jeff Bezoz and the Washington Post or Elon Musk and Twitter, tech giants have been more likely to turn their hands to media ownership in recent years. The post-2008 years were dominated by the soaring tech sector and wealth flowed in a way it did for hedge funds in the nineties and noughties.

Griffin and Marshall, whose firms both flirted with disaster during the financial crisis, both hate losing and have since thrived despite a lean period for the hedge fund industry, putting them in position to join the media mogul class. 

Griffin’s hedge fund is the most profitable in history, having made a record $16.4bn for its investors last year. As for Marshall, his partnership with Ian Wace has developed their equity firm, Marshall Wace, into arguably Europe’s leading hedge fund.

Since 2015, the firm has been minority-owned by KKR, the US private assets giant, in a partnership which has taken its assets past $60bn. In an industry dominated by multi-strategy giants – not least Citadel – which manage tens of billions across “pods” of traders and different strategies, Marshall Wace, which has discretionary and quant strategies, is one of the few non-US managers competing.

Marshall’s political activities raise the question of how politically inclined, and in what direction, are hedge fund managers?

It has been a common question during my years covering the sector. There is an image, widely held, of the typical hedge fund manager as a rapacious capitalist, stridently right-wing.

Look up the register of political donors in the UK and many of the top donors to the Conservative Party, it is true, have been hedge fund managers like Chris Rokos and Alan Howard.

When an unknown “Martin Taylor” gifted £600,000 to Ed Milliband’s Labour Party ahead of the 2015 it was headline news when he was revealed to be a hedge fund manager – so unlikely was the idea of a leftie “hedgie”.

But in my experience meeting many founders, it is a more nuanced picture. There were just as many leading hedge fund managers backing Remain in the 2016 referendum, including Sir David Harding of Winton Group, Andrew Law of Caxton Associates and even Rokos himself.

Inevitably the Brexit-supporting hedge fund managers, including Crispin Odey, Sir Michael Hintze and Marshall, attracted more attention, especially after the Leave victory. But even Marshall’s £100,000 donation was counterweighed by a gift of the same amount to Remain by his business partner Ian Wace

Don’t forget that Sir Chris Hohn, the billionaire founder of TCI Fund Management, is one of the main backers of the green activists Extinction Rebellion.

I wouldn’t expect a Telegraph led by Griffin and Marshall to cut them much slack. If their bid is successful – which it may well be – the pair will acquire a bigger helping of that ephemeral substance no end of hedge fund riches can provide: media influence.