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Elections

Hedge fund execs top presidential donor lists

Investment industry dollars favor Clinton over Trump

This presidential election season is shaping up to be the year of super PACs and megadonors, with hedge fund executives at the top of the list.

Candidates in the 2016 presidential race have raised an impressive $1.1 billion as of mid-September, according to Federal Election Commission data tracked by the Center for Responsive Politics, Washington.

Democrat Hillary Clinton's candidate committee had raised $373 million by Sept. 12, compared with $166 million by Republican Donald J. Trump's committee. Adding in money from their national parties and political action committees brings totals so far to $698 million for Ms. Clinton and $432 million for Mr. Trump.

When it comes to where the securities and investment industry is putting its money, the picture is even more lopsided: $58.6 million is going to Ms. Clinton vs. $557,480 to Mr. Trump, raised from industry employees as well as executives and by political action committees. “We are seeing that far more (in the securities and investment sector) are giving to Hillary Clinton than Donald Trump,“ said Viveca Novak, spokeswoman for the Center for Responsive Politics. “This is not a conventional election, because you have one candidate that is outside the mainstream party.”

That is a big change since Bain Capital LLC partner Mitt Romney sought the presidency in 2012. By October of that year, $16.4 million in individual donations from the securities and investment sector sector had gone to Mr. Romney, the Republican candidate, while $5 million went to Democratic candidate Barack Obama, according to a roster of employee donors from firms that included The Goldman Sachs Group (GS) Inc. (GS), Bain Capital, Renaissance Technologies LLC, Clarium Capital Management LLC and Blackstone Group LP, compiled by the CRP.

Securities and investment industry political action committees, which so far in this election cycle have given $11.6 million to federal candidates, heavily favored Republicans over Democrats 62% to 38%. But individual money managers and their employees often hedge their bets.

TIAA-CREF's political party breakdown, for example, was 54% Republican to 46% Democratic; Vanguard Group Inc., 57% to 43%; BlackRock (BLK) Inc. (BLK), 52% to 48%; and State Street Bank & Trust Co. 56% to 44%.

In the 2016 race, hedge funds and private equity firms donated a combined $94 million to all federal campaigns and outside groups, favoring Republicans 56.2% to 43.8%. Yet when it comes to the final contenders, they gave $41 million to Ms. Clinton and $205,360 to Mr. Trump, according to FEC records.

Since the 2012 election season, the securities and investment sector has become the largest single source of political contributions in federal elections. That sector, once associated with traditional Wall Street investment firms, is now dominated by hedge funds and private equity managers in general and their top executives in particular, according to the CRP.

Who's No. 1?

A list of individual contributors this election cycle shows the top five — among all types of donors — are current or former hedge fund executives. Former Farallon Capital Management LLC co-Managing Partner Thomas Steyer and his wife, Kathryn Taylor, hold the No. 1 spot, with $39 million donated to Democrats and liberal causes. Next come Renaissance Technologies co-CEO Robert Mercer and his wife, Diana, who gave $21.7 million to conservative causes.

Rounding out the top five are Paloma Partners LLC founder and Chief Investment Officer Donald Sussman, with $21.7 million to Democratic candidates; Elliott Management Corp. founder and co-CEO Paul Singer, with $18 million to Republicans; and George Soros of Soros Fund Management LLC, who gave $17.4 million to Democrats.

Other multimillion-dollar donors include James Simon and Henry Laufer of Renaissance Technologies, Kenneth Griffin of Citadel, and S.A.C. Capital Advisors' founder Steven A. Cohen.

Renaissance Technologies as an entity tops the list of Trump contributors at $15.5 million followed by non-financial firms, while Ms. Clinton's top three contributor firms are all hedge funds: Paloma Partners, $13 million; Renaissance Technologies, $11.5 million; and Soros Fund Management, $10.5 million. The figures represent donations to the candidate's campaign committee plus outside PACs supporting the candidates.

With 18 people vying at one point for the Republican Party's nomination, Republican donors have seen their political dollars divided.

Mr. Mercer of Renaissance Technologies, for example, gave $15.5 million to the PAC supporting Ted Cruz and $500,000 to the PAC supporting Carly Fiorina, according to the CRP. His colleagues Messrs. Simon and Laufer together gave $20 million to Democratic groups benefiting Ms. Clinton. Two conservative PACs, Right to Rise USA and Conservative Solutions PAC, are larger than the pro-Clinton PAC, Priorities USA Action, but their candidates Jeb Bush and Marco Rubio withdrew from the race.

Raised $1 billion so far

In the 2016 election cycle, super PACs have raised $1 billion so far and have already spent $530 million, nearly three times what they spent collectively in the entire 2012 campaign.Super PACs may raise unlimited sums from corporations, unions, associations and individuals, then spend unlimited sums to overtly advocate for or against political candidates. Unlike traditional PACs, super PACs are prohibited from donating money directly to political candidates or from coordinating their spending.

Super PACs now represent 80% of spending by outside groups; they gained prominence after the 2010 Supreme Court ruling in Citizens United vs. FEC, which held that political contributions were a protected form of free speech.

These groups are equally worth watching for the money they spend against a candidate. The Our Principles PAC, whose donors include Elliott Management and AQR Capital Management, opposes Mr. Trump, who has received little support from business interests so far.

And the money doesn't stop with PACs. Bundlers — people who round up contributions from friends and associates — have delivered $50 million in checks to Ms. Clinton.

Mr. Trump, like Mr. Romney, has not disclosed his bundlers. A breakdown of bundlers for Ms. Clinton by industry puts lawyers and lobbyists at the top, with $10.8 million, followed by the securities and investment sector with $6.4 million.

Last fall Ms. Clinton became the first presidential candidate to set up a joint fundraising committee with the Democratic National Committee and 32 state committees, allowing her to accept up to $356,100 per year from an individual donor. Donors can give $5,400 to the Clinton campaign, $33,400 to the Democratic National Committee and $10,000 to each of the state parties. Those contribution limits reset Jan. 1, effectively doubling the amount a donor could give this election season. n

This article originally appeared in the October 3, 2016 print issue as, "Hedge fund execs top presidential donor lists".