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Photographer: Simon Dawson/Bloomberg Photographer: Simon Dawson/Bloomberg

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As Boris Johnson heads into a general election battle, he does so in the knowledge he can count on the support of at least one loyal constituency: hedge funds.

In a little over a year, Johnson raised more than 400,000 pounds ($516,000) for his own campaign fund from hedge fund executives, investors and bankers -- a group that made up half of his donors, according to government figures. After Johnson initiated his bid to replace Theresa May in June, his supporters even held a secret fundraiser aimed at tapping prominent hedge fund managers, including representatives from Odey Asset Management and CQS. Robert Oxley, a Johnson spokesman, declined to comment.

The courting of one particular class of donors fueled speculation of an unholy alliance between the new prime minister and entities positioned to benefit from a particularly hard form of Brexit. It reached a fever pitch in late September and early October, after John McDonnell, the Labour Party’s shadow chancellor, called for an inquiry into a potential conflict of interest, and former Conservative chancellor, Philip Hammond, fanned the flames in an op-ed in The Times: “Johnson is backed by speculators who have bet billions on a hard Brexit -- and there is only one option that works for them: a crash-out no-deal that sends the currency tumbling and inflation falling.” Even Johnson’s own sister, Rachel, a dedicated remainer, suggested on BBC radio that the PM was in hock with those “shorting the pound or shorting the country.”

Despite a lack of evidence that Johnson is trying to help his hedge fund pals make a mint on the markets, questions about the relationship between his party and speculators are likely to intensify with this week’s official start of the general election campaign. The Conservative Party tapped City donors for at least 500,000 pounds during just the first five weeks after May announced her resignation as prime minister, according to the most recent figures available.

Still, there are several compelling reasons why they’re natural bedfellows -- not least a fear of the alternative.

Boris Johnson holds a Cabinet meeting at 10 Downing Street on Nov. 5. Photographer: Tolga Akmen/AFP via GEtty Images

Politics, Not Trading

That hedge funds will go to great lengths to profit from the trading opportunities afforded by Brexit is indisputable. Last year, Bloomberg reported on how financiers paid for secret exit polls that were streamed to them throughout the day of the 2016 referendum. Others procured data on forthcoming, market-moving surveys ahead of wider publication.

But making money in the current situation, when there are so many variables outside the government’s control, is a dicier proposition, according to traders. Short interest in sterling has whipsawed around with every new development from Westminster or Brussels. Johnson’s much-touted Oct. 31 exit failed to materialize.

Jon Moynihan

According to Brexit backer Crispin Odey, who heads Odey Asset Management, support for Johnson among financiers is about politics and not trading. “We want smaller government,” said Odey, who has donated to, or raised funds for, Johnson, the Conservatives and even Nigel Farage’s former U.K. Independence Party (UKIP). “I grew up when the U.K. was an unregulated place next to a very regulated Europe and everybody was arriving from Europe to work in London because the tax rates were low and it was an attractive place to work. Self-regulation is much better, and we’re about to go back to that.”

Venture Capitalist Jon Moynihan, who donated 100,000 pounds to Johnson’s campaign, says the whole idea that hedge funds disproportionately support Brexit is false. “This has nothing to do with hedge funds, the City, whatever. Look at the list of Leave supporters and we are the crowd that have actually built something and taken risk to create jobs and wealth -- the people who actually grow the economy.”

Fear of Labour

A large number of Johnson’s benefactors are long-standing supporters of the Tory party, or converts from the flailing UKIP. For those that aren’t, paying a few tens of thousands of dollars to forge a relationship with the incoming leader would seem expedient. Then there is perhaps the biggest factor of all: Jeremy Corbyn.

The Labour Party has pledged to raise taxes on capital gains, corporations and the roughly top 4-5% of individual earners. It also wants to force companies to dedicate 10% of their shares to employees, and to effectively abolish private schools. Corbyn even has singled out some multimillionaires and billionaires for public criticism, including Odey.

Faced with the prospect of a Labour government, it’s little surprise that hedge fund managers are lining up to put their hands in their pockets. One Johnson adviser put it this way: Corbyn has been a fantastic recruiting sergeant for fundraising.

— With assistance by Suzy Waite