February 26, 2008 / 9:28 PM / 11 years ago

Hedge funds embrace Obama, donate less to Clinton

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.

US Democratic presidential candidate Senator Barack Obama (D-IL) addresses his supporters during a campaign speech at the University of Cincinnati in Cincinnati, Ohio February 25, 2008. REUTERS/John Sommers II

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.

But the industry’s biggest and most successful funds appear to hedging their bets for a winner after Obama prevailed in 11 contests over the last two weeks.

“Obama may not be explicitly for hedge funds, but managers want to make sure that he isn’t against them either and that might factor into the trend in new donations,” Valentine said.

New York hedge fund Renaissance Technologies, run by former mathematics professor Jim Simons, supported Clinton with $50,600 last year. In January the fund gave nothing to its home-state senator but donated $9,100 to Obama who received only $2,300 from Renaissance in 2007.

Individuals can give only $2,300 during the primaries.

Similarly, D.E. Shaw, another New York-based fund, was less generous with Clinton in January, giving her only $3,600 compared with the $9,325 the fund’s employees donated to Obama. Last year, Clinton pulled in $58,500 from D.E. Shaw, outpacing the $17,294 that Obama received.

Reporting by Svea Herbst-Bayliss

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