Two years ago, Rishi Sunak assumed office as the first hedge fund prime minister of Britain. Ed Conway, Sky’s Economics and Data Editor, noted at the time that Mr. Sunak’s background sets him apart from other residents of Downing Street, having started his career at Goldman Sachs at the age of 21 and co-founding a firm registered in the Cayman Islands. However, it is his time at hedge fund TCI during the 2008 financial crash that is now under scrutiny.
Both the Conservative and Labour parties have released “attack ad” videos during the general election campaign, with Labour’s latest one focusing on Mr. Sunak’s financial background. In a parody of the iconic scene from The Big Short, comedian Jon Richardson examines Mr. Sunak’s career while drinking beer in a bath. He highlights Mr. Sunak’s tenure at TCI and their stake in Dutch bank ABN Amro, which was eventually sold to RBS, contributing to the bank’s near-collapse and subsequent £45.5bn taxpayer bailout.
The Conservatives have dismissed the video as “misleading” and “deeply sinister”, while Labour stands by its claims. In light of conflicting narratives, Sky News has looked into publicly available records to present the facts. According to Companies House documents, TCI made a profit of £321m in the year ending August 2007, Mr. Sunak’s first year as a partner, and £555m the following year. The hedge fund team received an average of £5m each during this period. Mr. Sunak left TCI in 2009 and was elected MP for Richmond (Yorks) in 2015.
TCI, which stands for The Children’s Investment Fund, was founded by billionaire Sir Chris Hohn and is known for its aggressive and secretive nature. In a select committee hearing, Sir Chris admitted to betting against British banks during the financial crisis, but claimed it was “relatively minor”. The hedge fund has also donated a portion of its fees to charity, specifically supporting charities addressing poverty in Africa and Asia through The Children’s Investment Fund Foundation. While TCI severed its formal connections with the foundation a decade ago, it continues to support it.
In a 2019 interview with the BBC, Mr. Sunak reflected on his time working in banking during the financial crisis, describing it as a stressful and extraordinary time. He also mentioned his experience at Winchester College, England’s oldest public school, as “intellectually transforming” and shaping his career trajectory. After studying philosophy, politics, and economics at Oxford University, where he was the first Indian-origin head boy and editor of the school paper, Mr. Sunak went on to complete an MBA at Stanford University in California, where he met his future wife.
During the 2022 Tory leadership race, Mr. Sunak denied personally benefitting from tax havens, despite co-founding a hedge fund registered in the Cayman Islands. When questioned by Sky’s Kay Burley, Mr. Sunak clarified that he had never benefitted and always paid full taxes wherever he lived. He also stated that the Cayman Islands registration was not his responsibility and that he had no involvement with the offshore company.
The Conservative Party has not addressed questions regarding Mr. Sunak’s involvement in the ABN Amro-RBS deal or his knowledge of it. TCI has also been approached for comment. In response to Labour’s video, a Conservative Party spokesperson reiterated that the claims were incorrect and accused Labour of revealing their “anti-business colours”. The spokesperson did not address questions about Mr. Sunak’s involvement in the deal.