Tudor Investment Corp has given birth to the first political-action committee created by a hedge fund, Brody Mullins and Kara Scannell of the Wall Street Journal reported this morning. It’s called "Tudor Investment Corporation PAC For Responsible Government."
The Journal’s reporters do a great job of telling the real story of what is going on here: the politicians are going after hedge funds for money because that’s where the money is. As the growing assets under hedge fund managers and the wealth of their managers has garnered the attention of the press, hedge funds have faced what Mullins and Scannell describe as “increasing scrutiny from policy makers.” In other words, the shakedown is on.
With $16.1 billion in assets under management, Tudor is the ninth-largest hedge fund, according to Institutional Investor, an industry trade publication. Fund officials declined to talk publicly about the new "Tudor Investment Corporation PAC For Responsible Government," which filed papers with the Federal Election Commission last month. But one executive, who spoke on condition of anonymity, said the committee was formed in part to help executives deflect the surge in fund-raising requests.
"It's an easy way for them to say 'no' or to politely decline those requests," said the executive of the Greenwich, Conn., company. "This is a way for people to say, 'Sorry, we have a PAC, so I'll pass along your request to the PAC.' "
For some reason, economists like to use the term “rent seeking” to describe the activities of special interests seeking favors from the government. But the term fits much better for the actions of politicians seeking to separate wealthy citizens and businesses from their earnings. Hedge fund managers only live in this country. The politicians are the landlords. And they think it's about time the hedge funds started paying rent.
In a democracy, forming PACs and hiring lobbyists is referred to as a sign that an industry is maturing.
Hedge Funds Coming of Age Politically [Wall Street Journal]
Earlier on DealBreaker:
Hedge Funds Not Giving Enough To Politicians, Politicians Surprisingly Determined To Change That [3.13.07]
As It Turns Out, Talk of Increased Hedge Fund Regulation Increases Hedge Fund Political Donations [9.18.06]