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Business profile: The Lib Dems' sugar daddy

   

Published: 12:01AM GMT 05 Mar 2006 Share |

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  Standing well in the background - his preferred

Related Articles habitat - was "one of the most powerful men in the
Lib Dem donor City", as Marshall was introduced on a recent edition
admits to short- of Any Questions?.
selling
Beekeepers protest Marshall, 46, is one of two co-founders of the
outside Downing Marshall Wace hedge fund, their portfolio worth
Street
anything from £4bn to £10bn - he's not saying. He
MPs expenses: Ann
Widdecombe is and Ian Wace are thought to have amassed personal
voters' favourite for fortunes north of £200m. Their flagship equity fund,
next Speaker in run from offices just off the Strand with panoramic
YouGov poll
views of the Thames, is among the 10 biggest funds
Radio Highlights:
Tuesday 23 June in Europe.
Speaker: candidates
take the Heineken test
But, like many in that world, Marshall is by nature
reticent. "Oh God, I wasn't on the news, was I?" he
says. He hates publicity. But this moderniser has
agreed to talk of his passion for politics.

He has been a lifelong member and cheerleader for the Liberals in their various
guises, donating an estimated £30,000 to the party and ploughing £1m into an
independent liberal think tank, CentreForum. (He is also a devoted supporter of
the charity Ark, which helps children who are the victims of abuse, illness,
disability or poverty.)

During our interview he occasionally remembers to refer objectively to "the Lib

Dems". Mostly, though, he forgets. "We," he says. "Us."

Only rarely do his two worlds, and twin passions, collide. Marshall has made
time for both by stepping back from fund management to become chairman of
Marshall Wace Asset Management - last week he was in Asia, checking out
whether its new office should be in Hong Kong or Singapore - and extending
already long days to accommodate Lib-Demmery in the evenings.

He does use some intelligence harvested from the markets in his understanding Google.com/LocalBusinessC
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of politics - the movement of energy stocks, for example.
"What I see at the moment is a huge bull market in alternative energy. What I
hear from Tony Blair is that alternative energy is not going to be the solution to
our energy needs, so we have to look at nuclear. Then I look back at stock
markets and see that nowhere in the world is anyone prepared to finance
nuclear energy in a free market - only through government. That tells me the
problem is not solved."

Politics has been a preoccupation ever since his enthusiasm was fired by the
formation of the SDP in 1981. Two decades ago Marshall spent a few months
as a researcher for Charles Kennedy. He ran for Parliament in 1987, in the
Tory/Labour marginal seat of Fulham.

At the time he was two years into a career at Mercury Asset Management,
which must have been relieved by his failure to win the seat. By 1989 he was its
chief investment officer for European equities; by the time he left, his 15-strong
team managed $12bn in equities. He founded MW in 1997.

"I didn't do very well [in Fulham] but it was a great experience." His adrenaline-
fuelled concession speech was a "complete rant".

"I went on much longer than I should have done," he says. "It was, 'Don't forget
this night, because Britain is going to become more divided than ever etc, etc.' "

Has he always voted Liberal? "I can't remember who I voted for in 1979, my first
election," he admits. "But I recently found a letter from my father, replying to
one from me, and it suggests that I was pretty left-wing." Marshall was reading
history and modern languages at St John's. His father was chairman of Unilever
in the Philippines, and the two wrote weekly.

"He was saying, 'What you have to bear in mind is that for the past 10-15 years
our country has been run without any attention to the wealth creation process.
We're running out of money and Thatcher has understood this.'

"There's an interesting parallel," Marshall says. "As the saying goes, Labour
governments always run out of money. By the next election we will be spending
up to the European average on health and will have far worse results, and up to
the European average on education, in most cases, and have far worse results.
Labour has blown it."

He admires Gordon Brown for his political conviction, if not his methods of
delivering policy via the state. He has not joined the cult of David Cameron
("Opus Dave" as political wags call it), resentful that he has shifted the Tories
onto traditional Liberal territory - even though they would now make more
palatable coalition partners.

"If you asked David Cameron who his heroes were, he'd say Maurice Saatchi
and Tim Bell. There are two types of politician - those in the Gladstone tradition
and those in the Disraeli tradition. Brown is in the Gladstone tradition. Cameron
is in the Disraeli, greasy-pole tradition."

Marshall believes these are momentous times for the Lib Dems, despite the
downfalls of Kennedy and Mark Oaten. He is buoyed by the party's unexpected
victory in the Dunfermline by-election, and hopes for a hung parliament after the
next election.

"I decided to devote a lot of time to the Lib Dems because I think there is a very
high probability they will be in overall control in the next parliament," he says.
He's done the maths - you wouldn't question Marshall's maths - on the Labour
seats likely to disappear in boundary changes and the swing needed for an
overall Tory majority. "I don't think the media has fully picked this up," he
repeats. "The Lib Dems will be the bride next time round."

During Kennedy's leadership his advisers privately nicknamed their favourite

benefactor "Moneybags". He and Ian Wace shared almost £50m in pay and
dividends in the two years to August 2004, according to the hedge fund's most
recent accounts.

Marshall says there is a "big difference" between the unelected Lord Ashcroft's
targeted funding of Conservative marginals and his funding of the think tank. "It's
trying to get good ideas implemented, but it's up to the party whether it accepts
or rejects them."

Even so, his role within the party troubles him. "Do I have any legitimacy? I'd
rather have an elected position." He won't rule out or rule in standing as an MP
again; certainly, nothing is planned in the medium term. Being a sugar daddy is
clearly uncomfortable.

"Money is a major disadvantage in British politics," Marshall argues. "Both

having it and giving it. By having it, it's what people then associate you with. I
just want to participate in a political process, a battle of ideas, in a one-
member, one-vote party. I have one vote, like everybody else, and I also want
my ideas to be influential. I don't want them to be devalued by the fact that I've
got money."

Marshall was a co-editor of the Orange Book, a series of essays by

frontbenchers and young MPs which advocated more pro-market policies and
caused quite a rumpus among Lib Dems. One chapter called for Britain to
adopt a French-style insurance-based health system. It wasn't official policy
and some on the left of the party began to question Marshall's motivation. As
one activist told me: "His money is welcome, but it's not an Open Sesame to
policy-making".

One party adviser, however, says Marshall's contribution goes beyond money.
"He's committed. He doesn't just fund the think tank; he's its chairman. This
week he was helping an MP with his conference speech for Harrogate. It's not
exactly glory-hunting."

Marshall himself is decidedly unflash, today wearing a shapeless navy jacket

over casual black-gone-green trousers. He has lived for many years in the same
house in south-west London with his French wife and teenage son and
daughter. He used to pay his son to deliver political leaflets until he was scared
off by the local dogs.

Will he give more money now that Campbell has won? "No comment," he says,
though it has apparently been suggested that he host a series of City dinners to
promote the Lib Dem cause. It might be safer. If Marshall gives to the party on a
heroic scale, as he points out, "people will say, 'well, he's trying to buy policy'.
If I don't give to the party, people think I'm being stingy.

"I have a lifelong passion for politics. I'm a lifelong liberal. I'm trying to contribute
to better ideas and help us get into government. Funnily enough, money doesn't
really help."

Publishers wishing to reproduce photographs on this page should phone

44 (0) 207 538 7505 or e-mail syndication@telegraph.co.uk

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