The Lib Dem donor who’s “one of the most powerful men in the City”

by Stephen Tall on December 28, 2009

The Times today profiles Paul Marshall, founder of top hedge fund manager Marshall Wace, and a former SDP/Liberal Alliance candidate who has donated in excess of £162,000 to the Liberal Democrats as well re-founding the liberal think-tank Centre Forum. Here’s an excerpt:

Mr Marshall, who stepped back from his investment role in 2004, decided to take on a more active position at the hedge fund last year as the markets started sliding and the group’s profits were reportedly down 75 per cent. However, the hedge fund made an £88.8 million profit in the 18 months up to February 2009 and Marshall Wace’s senior managers will share a £55 million bonus pool as a result.

It is understood that Mr Marshall will be the highest-paid director, although the allocation of the bonus pool has yet to be confirmed. It would further boost his personal fortune, which is estimated to be well over £200 million, and help to restore his image as being one of the most powerful men in the City.

From his office just off the Strand in Central London, Mr Marshall, 50, who is the public face of the fund he founded, can see the Houses of Parliament, a constant reminder of his political ambitions. He stood unsuccessfully for parliament in 1987 for the SDP-Liberal Alliance in Fulham and has kept close ties to the Liberal Democrats ever since, not only as a donor but also as a researcher for Charles Kennedy and lately as an adviser to Nick Clegg.

He has acted as chairman of the City Liberal Democrats and the Liberal Democrat Business Forum and co-edited the controversial The Orange Book in 2004, which contained essays championing pro-market policies.

He founded the independent liberal think-tank CentreForum, into which he poured £1 million of his own money, and was also a founding trustee of Ark, the children’s charity.

Although his political activities have taken more of a back seat since he resumed his investment career, he has continued to be vocal about hedge fund policy, publicly opposing the ban on short-selling and calling for more disclosure in the traditionally opaque industry.

And of course it’s worth noting that Paul Marshall – despite being one of the party’s top donors – still had to put himself forward for election as a working Liberal Democrat peer in the House of Lords in the same way as every other party member was eligible to do. He was elected by his fellow party members to the Lib Dems’ interim peers panel in 2006.