Hedge funds embrace Obama, donate less to Clinton

By Svea Herbst-Bayliss

BOSTON (Reuters) - Hedge funds shifted bets in the hotly contested U.S. presidential race in January when they wrote bigger checks to Democratic contender Barack Obama after favoring his Democratic rival Hillary Clinton in 2007.

The $1.8 trillion hedge fund industry donated $50,450 to Obama last month when the Illinois senator won wide support among voters in early caucuses and primaries, new data show.

Clinton, who lost Iowa but defied pollsters by winning the New Hampshire primary, took in $18,800, the lowest donated to either party's front runners.

In comparison, hedge funds gave $26,400 to Republican front-runner Sen. John McCain in January, according to the data compiled for Reuters by the Center for Responsive Politics, a nonpartisan campaign finance research group.

"Hedge funds may be synchronizing their giving with Obama's pull ahead in the polls, and people might be realizing that if they haven't given him money already, it might not hurt them to write some checks now," said Denise Valentine, who focuses on hedge funds at financial consulting firm Aite Group.

January's numbers are in contrast to last year when Clinton, a New York senator, pulled in $681,250 while Obama raised $552,374 and McCain received a much smaller $116,550.

Managers and analysts had expected Clinton to keep drawing the lion's share of donations because many hedge funds managers have expressed support for her pro-business stance, health care ideas and education reforms.

Obama's broader calls for change unnerved the loosely regulated industry, several fund managers said privately, worrying change might mean less freedom for them.