Lord Sugar hit the headlines earlier this year when he was appointed the government’s enterprise tzar. But when it comes to political influence, the host of The Apprentice has been eclipsed by another hugely wealthy Jewish businessman. Stanley Fink, the multi-millionaire hedge fund manager, is emerging as a hot political commodity.
He has already bankrolled Boris Johnson’s successful campaign to become London mayor. Now, as co-treasurer and chief fundraiser of the Conservative Party, he has himself donated more than £1m, and reportedly aims to raise a further £40 million as the Tories gear up for next year’s general election — a victory would undoubtedly see Fink’s importance to Tory leader David Cameron increase.
Not that these political ambitions have meant the tycoon has been distracted from his business activities. Fink, who turned 52 this week, is an increasingly powerful force in the City, where he is considered to be one of the finest brains in his field. And, perhaps surprisingly, given the image of the cut-throat world of hedge funds, he is also held to be a genuinely nice guy by those who have dealings with him.
A brain tumour in 2005 hastened his decision to step down from his position as chief executive of Man Group — the world’s largest listed hedge fund with assets of more than $80 billion — to pursue his philanthropic interests, but he has since resurfaced as the chief executive of International Standard Asset Management (Isam) — a small hedge fund chaired by former Labour Party fundraiser Lord Levy. Fink is worth an estimated £70 million, according to The Sunday Times Rich List.
He continues to give away a third of his earnings to charities, many of them Jewish. Fink is an important communal benefactor but, while in his politics he stands right of the centre, when it comes to Judaism his beliefs are distinctly Liberal.
I have accepted that, as we live in multi-cultural Britain, one of my children might not marry someone Jewish
Speaking at Isam’s offices in south-west London, the softly-spoken businessman explains how both he and his wife, Barbara, were born into Orthodox families but choose to follow different paths once they were married, both for practical and theological reasons, and for the sake of their three children.
“I have accepted that as we live in a multi-cultural Britain there was a chance that one of my children might not marry someone Jewish and it would probably be more comfortable for them in a non-Orthodox environment, where their partner could be more easily accepted,” he says.
While acknowledging that his parents would have preferred him to remain Orthodox, he adds: “When we got married we lived in an area that wasn’t really in walking distance of a synagogue and I didn’t want to feel a hypocrite driving to an Orthodox synagogue on Shabbat and High Holy Days. And we didn’t know a lot of people in the area so sitting apart from my wife wasn’t something I looked forward to.”
The couple spent time “shuling around”, as he puts it, and tried out a Liberal shul. “We found it most welcoming and with the greatest sense of community,” he recalls.
Now a longstanding member of a Liberal congregation in north-west London — he prefers not to reveal which one — he says he understands two thirds of an Orthodox service and 90 per cent of a Liberal one.
“You feel it is more of a service where you can participate; there’s no talking, people listen and children sit there for an hour, an hour and a quarter.” Besides, he says, he enjoys being one of the more religious people in a less religious synagogue.
Fink is extremely active in the community. He is chairman of the Council of Patrons of Liberal Judaism, honorary vice president of Liberal Judaism, chair of the Oxford Centre for Hebrew and Jewish Studies, and recently became a member of the Jewish Leadership Council, together with fellow Tory treasurer and businessman Howard Leigh. “Being Jewish is part of what I am and it is an inheritance I am proud to pass on to my children,” he says.
He reveals that one of the reasons he backed Boris Johnson for London mayor was his view that Johnson’s rival, Ken Livingstone, was unfriendly to Jews.
“Even if I had not had any affiliation to the Tory party, I would have been a big supporter of Boris ahead of Ken,” he says. “I felt that Boris was extremely good at bringing communities together and helping them to work together, whereas Ken would cynically exploit the differences between communities and in the case of Jews, took the view that pandering to the Muslim vote was more important than pandering to Jewish vote. Basically, he demonstrated that he wasn’t a friend of Anglo-Jewry.”
Much of his outlook on life — his politics and his philanthropy — he attributes to his experience as a young man growing up in a lower middle-class family in Manchester where his father ran a grocery shop.
“I have always been instinctively slightly right of centre,” he says. “I saw the negative impact of trade unions first hand when I did a couple of student jobs.” He was working in a paper factory in Bury and had developed a new method of generating more orders. After a couple of days he was taken aside by a trade union shop steward. “He told me that this was very unhelpful because he had people who weren’t able to pick orders at quite the same rate and could I do it one at a time,” recalls Fink. “I remember thinking that was a great shame because clearly my way was better for the company. I saw a negative side of trade unions. I understood it but I didn’t accept it. I think that hardened my views.”
He believes he inherited his philanthropic streak from his parents. “They were never rich but they always had the philosophy that if you were approached by somebody you knew or a cause you had a connection with it wasn’t a question of ‘yes’ or ‘no’, but of ‘how much?’” He says there is a responsibility on successful people to give. “If you are fortunate to be able to pay high-rate tax, then you can afford to give a bit more to charity. How much more is a matter for one’s own conscience.”
Today, he and his wife, Barbara — they met in their teens while working for a Jewish voluntary youth organisation in Manchester — are particularly interested in charities involved in children’s welfare and the environment. “We tend to rarely say no but we tend to give less if it’s not in our key themes,” Fink says. He is the newly-appointed chair of children’s charity ARK (Absolute Return for Kids) and has helped raise millions of pounds for the Evelina Children’s Hospital Appeal Committee, attached to Guy’s and St Thomas’ Hospital.
The money that allows such generosity has been accumulated during Fink’s steady rise through the financial world. After Manchester Grammar school and Cambridge University, where he gained a law degree, he landed his first job at the accountancy firm Arthur Andersen. Next up was Mars, Citibank and then Man Group in 1987, where he worked his way up, gaining the post of chief executive in 2000.
Known by colleagues as “the Godfather” of the hedge fund industry, he has left a legions of admirers in his wake — Philip Beresford, compiler of The Sunday Time Rich List, describes him as inspiring.
“He is one of the finest brains in the City, who is now striking out on a new career trying to mobilise the City to think of disadvantaged communities here and around the world. He is an inspiration to all those hedge-fund managers to think of something different in life. He is clearly thinking of the long term and sees wealth as something that should be used for the benefit of society.”
According to Howard Leigh, fellow Tory treasurer and financier, Fink is a “super guy”.
He enthuses: “He is an outstanding person for his commitment outside of business in the way he helps charities, not just by giving funds but also raising funds. He gives his time and he puts huge amounts of his own commitment into these charities he supports.”
It was through a Jewish charity that Fink first met Lord Levy. They have long been acquaintances, but their current business association began only a year ago, while Fink was still on sabbatical from the City.
“Michael approached me because he was thinking of joining Isam, and I was able to say that I knew the principals and found them to be very decent people, so I gave him a positive reference,” he explains.
“Michael’s mix of skills were clearly more on the people side — he hadn’t had management responsibilities in a financial services business in the recent past, and it turned out that they needed a general management role if they were going to grow successfully. At that point, Michael and the team asked me to join and I said yes.”
The Isam way of working suits Fink’s ambition to try a different way of doing business after Man. Isam places the emphasis on the judgement of the individual trader when it comes to investments, as opposed to relying on computer programmes such as used by Man’s flagship AHL Diversified fund.
“It meant a lot to me that people believed that I had gone elsewhere and not just copied the formula,” he says. “I’ve always taken pride that I have never been a plagiarist and so that was important to me.”
It is almost 12 months into his new role and “things are going well in what has been an interesting year for our industry”, he says.
Does he chat politics with Lord Levy? “We do talk politics. We have historically respected our differences. I understand his background and where he comes from and I think he understands mine. It’s a bit like how I am friendly with Jews who are Orthodox and Jews who are Liberal. People always focus on the differences between people, forgetting that genetically we are probably 99 per cent similar and one per cent different.
“Michael and I have much more in common than we have differences — we have so many similar views on Judaism, philanthropy, family and Israel.”
Fink, who used to make monthly trips to the Holy Land when he was a director of the Israeli confectionary company Elite, has strong views on Middle-East peace.
“I am a believer that a peace deal should be done but I am aware that in order to make peace, you have to have a partner to agree. I think that is the thing that many people in the non-Jewish press and media overlook. Whenever Israel has had a credible partner to make peace, it has found a way to do it, even if it has involved some compromises and unpopular decisions. The sad thing with Hamas is that it is not a credible partner for peace. But in areas where there has been a credible partner, such as Egypt and Jordan, Israel has always been prepared to make peace and I would always applaud that.”
It is a typically thoughtful response — throughout the interview, Fink takes time when responding to questions, never rushing his answers.
He takes some time to reply when asked what would be top of a Tory government to-do list should the party win the election next year.
Pointing out that he is not involved with front-line politics, he continues: “I think, from speaking to Conservatives, the central thread coming through is people taking personal responsibility for their lives. There is certainly a desire that the state should be a bit smaller and people should be bit bigger and more grown up about their destinies. There is a feeling that big central solutions to things like education is probably wrong, and that sometimes smaller, more localised decisions and solutions are better.”
Fink is chair of Ark, a charity which runs academy schools in London. It has a roll of 4,400 children. As someone so involved in education it is perhaps surprising that he admits he has “flip-flopped” over the issue of faith schools.
His initial preference for his own children was to send them to a Jewish primary and mainstream secondary. “I think it is important to learn about your own faith, and then learn that you live in a wider world, and to encounter relationships with people of different faiths before you go to university.
He says he is sceptical about some aspects of faith schools at secondary level. “I came to question people who claim to believe in faith secondaries but who really just want a slightly better education for their children without paying for it. I was always slightly sceptical about people who were passionate supporters of faith secondaries.”
He was also worried about what was being taught in some faith secondaries, specifically whether they were failing to promote religious tolerance.
“But when I reflected on it, my final view was to look at society’s ills as a whole — high pregnancy rates, crime — and to realise that if a faith school can impart discipline and morals to some people then, even discounting for the fact that some people don’t share the experience of mixing with other religions, perhaps there is more good in having faith schools, irrespective of what faith they are teaching.”
He points out that one of Ark’s academy schools is nominally a Church of England school, has a majority of Muslim pupils, has a Catholic head teacher and a Jewish sponsor and chair of governors — himself. “I think that is actually really neat,” he says.
What does he make of the JFS case? “The Court of Appeal judgment is complicated in that Jews need to decide whether we are a religion or a race and there are times where there seems to be confusion in the thinking.”
A typical working week for Fink comprises 30-plus hours on “the day job” at Isam, one day a week on Tory Party matters and around 10-plus hours on philanthropy. He relaxes by skiing, playing golf, enjoying good dinner conversation and playing Sudoku.
Such a hectic schedule is perhaps remarkable for a man who, only four years ago, suffered a brain tumour. He was on a safari in Botswana with his wife and children when he was taken ill. Doctors discovered a benign tumour, which was successfully operated on.
The experience made him realise that life “is not a dress rehearsal”, speeding up his decision to leave Man Group to take on more charitable work.
“At the time I think I underestimated how long it would take to recover my stamina,” he says. “I got most things back within a year and assumed that that was about as good as I was going to heal, and at that point, my stamina was still quite limited. But I carried on getting better for three or more years. Maybe my decision to step down was based on inadequate information and if I wanted to, I probably could have carried on working. Although frankly, given the way the industry has evolved, maybe it was not a bad thing for me to step away from Man.”
The hedge fund industry is facing turbulent times, what with the imminent 50 per cent tax on high earners, EU plans for stricter regulation, and having to deal with the public’s perception that it helped cause the recession. But who does Fink feel was responsible for the banking collapse? Again, he takes time before answering.
“I think you have to look for blame in three or four tiers. In the medium-term, it was commercial banks which were competing with one another to lend at narrower and narrower credit spreads to parties of very poor credit worthiness or parties who were reasonably credit-worthy but deserved to pay a higher price to reflect the risk. So, it was a case of the banks not really pricing the risk properly.
“The longer-term battle probably began in the Clinton era in America where banks were forced to lend some of their assets to the sub-prime market as it was deemed that a large part of the US population was not being serviced by the banking community. And so, the banks were lending to people of poor credit history.
“You could say it was that original encouragement to lend unsuitable individuals large amounts of credit, and that it was the good intentions by the government which started the problem in terms of the sub-prime crisis.
“You could also say it was the credit agencies’ fault for allowing tranches of bad debt. I think that when certain scenarios happened there was a bit of contagion and all the actuarial models fell apart.”
He adds: “There had been before that a general under-pricing of risks in markets. Markets assumed that benign conditions would last forever.”
Fink speaks from the perspective of someone intimately acquainted with the workings of the financial markets. It is the sort of knowledge that will prove to be invaluable should the Conservative Party win the 2010 election, when it looks as if the Manchester grocer’s boy will find himself playing a powerful role in the running of the country’s economy as it emerges from recession.
Stanley Fink
Born: September 15, 1957
Education: Manchester Grammar School; Trinity College, Cambridge
1983-86: Vice President, Citibank
1987-2008: Director, Man Group
2000-07: Chief Executive, Man Group
2007-08: Deputy Chairman, Man Investments
2008-present: Chief Executive, International Standard Asset Management
Family: Married, two sons, one daughter
Non-business positions: Co-treasurer of the Conservative Party, leading a working group on an environmental market for the Shadow Chancellor, George Osborne; chairman of the Council of Patrons of Liberal Judaism; honorary vice president of Liberal Judaism; member of the Jewish Leadership Council; chair of the Oxford Centre for Hebrew and Jewish Studies; chair of Ark childrens’ charity
