Hedge funds back gay marriage

Author: Matthew Garrahan
Publication: Financial Times
Publication Date: July 24th, 2012

A group of wealthy pro-Republican hedge fund managers is backing efforts to legalise same-sex marriage in four US states that will vote on the issue in November, as the party’s more socially liberal donors try to regain ground ceded to social conservatives.

The campaign to win same-sex ballots in Maine, Maryland, Minnesota and Washington has received financial support from Paul Singer, the hedge fund billionaire who is one of the party’s biggest donors, and Cliff Asness, the founder of AQR Capital Management.

Dan Loeb, the activist investor who recently shook up the management of Yahoo and Seth Klarman, the founder of Baupost, the private equity group, are also backing the campaign. The four men have donated money to Freedom to Marry, a non-profit group that aims to legalise same-sex marriage, and have also contributed to American Unity, a super-political action committee started by Mr Singer which will give financial support to Republican congressional candidates that back marriage equality.

Ken Mehlman, the head of public affairs at KKR, the private equity group – and the former chairman of the Republican National Committee – is also backing the same-sex marriage campaign.

“Supporting the right of adults to marry the person that they love is consistent with Republican and conservative principles,” Mr Mehlman told the Financial Times. With recent poll data showing a surge in support for same-sex marriage, the Republican party needed to stay relevant with voters, he added. “A party that ignores reality and demographic change is a party that loses a lot of elections and becomes less relevant.”

Republican-controlled state governments have been more vocal in their opposition to legalising same-sex marriage than those controlled by Democrats. But there are signs this is changing: last year, the Republican-controlled state legislature in New York legalised same-sex marriage. Mr Singer – he has a gay son – Steven Cohen, the billionaire hedge fund manager, and Mr Asness were among the Republican donors that backed the New York campaign.

“I don’t think we’re going to suddenly convince the socially conservative wing of the party to agree with us,” said Mr Asness. But offering financial support to candidates who are pro-same-sex marriage “will give support and lend some courage to those in the party who are in the middle on the issue”.

Same-sex marriage is a cross-party issue, added Mr Loeb. “We want to see freedom for everyone and as a means to get there we want to give Republican legislators the cover they need to vote with their hearts as opposed to some other basis.”

Mr Singer, a key fundraiser for George W. Bush and, more recently, for Mitt Romney, has given nearly $10m to gay rights causes and started American Unity with a $1m donation. Messrs Singer, Mehlman, Asness and Klarman have together donated more than $1.5m to Freedom to Marry, representing about 20 per cent of the group’s budget.