(Bloomberg) -- In London’s Westminster district, the center of British political power, a 60-meter stretch symbolizes Paul Marshall’s bid to shape the future of conservatism in the country — and the vast hedge fund fortune he’s putting behind that push.
At one end of Old Queen Street, the headquarters of the billionaire’s media venture UnHerd occupies one of the grandest townhouses. Just one minute’s stroll from its ground floor cafe, you reach his empire’s newest outpost: the Spectator — the world’s oldest weekly magazine still in print, which the chairman and founding partner of Marshall Wace LLP just bought for £100 million ($131 million).
That’s a hefty premium for an outlet that recorded a profit before tax of just £2.6 million in 2022, according to accounts filed at Companies House. The Spectator had an average of 93,000 UK subscribers in 2022, a year in which it generated record sales of £20.8 million.
But making a profit doesn’t seem to be the driving motive of the 65-year-old, who’s been building his own footprint in the media industry over the years. He is a backer of GB News — a news channel with ambitions to become the British version of Fox News. He owns UnHerd, a growing online platform for largely right-leaning opinion.
Adding the Spectator, which is known to exert serious sway over the British Conservative Party, gives him immediate establishment credentials and cements his status as one of the most influential media owners in the UK.
Rather than financial considerations, his move for the right-leaning Spectator is mostly aimed at having a say in Tories’ affairs, said Claire Enders, founder of media research company Enders Analysis and Jacob Schmidt, who teaches finance at Regent’s University London.
The acquisition is in line with other successful hedge fund and private equity personalities who have sought to influence politics with donations, including Citadel founder Ken Griffin and Elliott Investment Management’s Paul Singer. “With the reconstruction of the Tory party, Marshall will play a bigger part - and media is an important factor,” said Schmidt, who also runs a namesake investment advisory firm.
As the owner of a magazine such as Spectator, one can have direct access to the Tory leader and lunch with top politicians, Enders said. “It’s really about access to that inner circle of decision-makers as the Conservative Party picks itself up and dusts itself off,” she added.
A person familiar with the deal described the Spectator as one of the most trusted English language publications in a crowded and rapidly-changing media sector, which they said justified the £100 million price tag. The new owners plan for the Spectator to use new technologies including AI in ways that have not been previously considered, they added.
Marshall’s OQS Media also owns CoEditor Ltd., which it describes as a publishing technology startup.
Many prominent billionaires, including Jeff Bezos, John Henry and Patrick Soon-Shiong have invested in or owned publications, with some yearning for a voice in politics. But the 65-year-old Marshall’s complex political journey gives him particular appetite for such a trophy acquisition, coming just weeks after the worst election defeat in the history of the Conservative Party.
Until Britain’s referendum on leaving the European Union, Marshall was associated with the centrist Liberal Democrat party, having co-edited books with its leading politicians and chaired a liberal think tank called CentreForum. He even once unsuccessfully ran for Parliament as a Liberal Democrat. But he supported Brexit, and after the UK vote to leave the EU, he rallied behind the Conservatives and has been the driving force behind some new, prominent and at times controversial right-leaning media outlets in the country.
Quant Trading
Marshall and Ian Wace founded their namesake money-management firm in 1997. The hedge fund company specializes in fundamental and quantitative trading strategies focused on stocks and is part-owned by private equity giant KKR & Co. It is one of Europe’s biggest, and has grown at a blistering pace while the wider industry has seen persistent outflows. The assets it oversees have more than doubled to about $68 billion since 2016, according to a person familiar with the matter.
While Wace has avoided the media limelight, Marshall has been the public face of the hedge fund as its chief investment officer. From leading the firm’s biggest money pool Eureka and writing its widely followed newsletter, Marshall’s interests have long ranged from philanthropy and faith to politics. He was knighted for services to education and other charitable activities in 2016.
Despite those credentials, Marshall has his own set of detractors because of his political views, which are often considered complex and divisive. Among them is Andrew Neil, the chairman of Spectator, who’s been an outspoken critic of both the hedge fund boss and GB News. Neil joined the upstart news channel as chairman with his own show but left shortly after its glitch-filled launch. He later said he stepped down because of differences over its future direction.
Speaking to Parliament’s House of Lords in April, Neil expressed concern about the prospect of Marshall owning a newspaper because of his hedge fund involvement and the risk of his ownership influencing the reporting of certain stocks Marshall Wace is betting against.
“Should hedge funds be allowed to own newspapers? I would say no,” Neil said at the time. He resigned as the Spectator’s chairman following confirmation of the deal, which he slammed in a blunt social media post on X.
“No doubt the new proprietor will bring assets to the table, perhaps even bigger budgets. However you can have all the resources in the world but if you don’t understand what really makes The Spectator tick then they will be as naught,” Neil wrote. He said he couldn’t be sure that the new owners would maintain the publication’s standards of editorial independence.
Marshall Wace currently has short positions in high-profile British companies such as Burberry Group Plc, British Airways owner IAG SA, Tesco Plc and British American Tobacco Plc.
Other critics include Jeff Zucker, who used to run CNN. The chief executive officer of RedBird IMI — a joint venture that was earlier forced to abandon its acquisition of the Telegraph and Spectator after political backlash over its ties to the United Arab Emirates — said in March that Marshall was “unfit to own a newspaper.”
That was after an investigation by the News Agents podcast found Marshall had endorsed posts on X through his private account that attacked immigration and Islam. All his posts were later deleted and Marshall said in a statement that the sample of posts did not represent his views.
Marshall’s son Winston, a musician, has faced his own controversy. He stepped down from the folk rock band Mumford & Sons in 2021 after a backlash around his support for a book that criticized Antifa, the leftist protest movement. That led the musician to become a vocal advocate for free speech and he went on to secure a regular podcast with the Spectator before launching his own earlier this year. It features interviews with commentators on topics such as Islam, censorship and trans-gender issues.
Brexit Backer
Paul Marshall studied at St. John’s College, Oxford, before graduating with an MBA from French business school Insead. He turned to finance after his short dalliance with politics. Later, he swung behind the Conservative Party in 2015 as he became one of Brexit’s most prominent backers. A current Liberal Democrat politician said they had noticed Marshall becoming more right wing in the years since they had known each other.
Chris Huhne, a former Liberal Democrat MP who served nine weeks in prison in 2013 in relation to a speeding offense, said Marshall was one of the people who asked to visit him in prison. Ultimately, Huhne was released before Marshall was able to visit.
“He’s very well-meaning and public spirited, that’s his fundamental character,” said Huhne. “I just don’t know exactly what happened that he ended up with some quite odd views on the right. I understand the market ones, I’m not sure about providing a home to some of the other stuff that comes up on GB News.”
Marshall and his wife Sabina attended annual parties hosted by Huhne at his former home in Clapham, south London. Before distancing himself from the Liberal Democrats over his support of Brexit, Marshall provided space in his offices for senior members in the party to hold meetings.
“He’s very evangelical, which is the key to understanding his whole politics,” said Huhne.
Marshall, with his friend David Laws, was an editor of The Orange Book: Reclaiming Liberalism, a collection of essays that included chapters that recommended replacing the National Health Service with an insurance plan.
The billionaire may not be done yet with his shopping. He’s in the race for one more trophy asset — the Telegraph newspaper, another media outlet historically intertwined with the upper echelons of the Tory party.
If Marshall manages to snap it up, he could arguably become the most politically influential hedge fund manager in the world.
--With assistance from Ben Stupples.
(Adds details throughout. An earlier version of the story was corrected to clarify that Marshall directly owns his stake in GB News.)
©2024 Bloomberg L.P.
