Hedge-fund managers made a big bet on Barack Obama and other Democrats in 2008. Now, with the 2012 contest gearing up, some prominent fund managers have turned their backs on the party and are actively supporting Republicans.
Daniel Loeb, founder of Third Point LLC, is part of a shift in political allegiance within the world of hedge funds that also includes such big names as Steven Cohen’s SAC Capital Advisors and Kenneth Griffin’s Citadel Investment Group. Managers and employees of hedge funds directed a majority of their contributions to the GOP in the 2009-2010 election season, a pattern not seen since 1996, when the industry was much smaller.
The shift toward Republicans is by no means universal.
Wall Street ranks alongside the legal profession and Hollywood as a plank in almost any presidential candidate’s fund-raising. After lawyers, the investment sector was the largest source of donations for Mr. Obama’s 2008 presidential campaign among industry sectors tracked by the Center for Responsive Politics. And hedge-fund money is the fastest-growing segment of contributions from that industry, more than doubling every four years. Investors are pouring money into hedge funds again, after souring on them during the financial crisis.