From Goldman Sachs to Downing Street: Tracing Rishi Sunak’s Journey Through Finance and Politics

In a discussion with Nick Robinson from the BBC in 2019, Rishi Sunak shared his experiences working in the banking sector during the financial crisis. What was the Prime Minister's career like before he ventured into the political arena?

By Josephine Franks, news correspondent and Sarah Taaffe-Maguire, commerce journalist

Tuesday, June 4, 2024, 7:

Two years after Rishi Sunak settled into Number 10, he was hailed as Britain's inaugural prime minister from a hedge fund background.

Sky's Economics and Data Editor Ed Conway noted that Mr. Sunak's resume stands out distinctly from nearly all other Downing Street occupants.

He began his career at 21 years old at Goldman Sachs and later co-founded a company that was registered in the Cayman Islands.

The focus has shifted back to the period when Mr. Sunak spent three years at the hedge fund TCI, a tenure that coincided with the 2008 financial crisis.

Throughout the general election campaign, the Conservative and Labour parties have been launching videos criticizing each other. Labour's most recent video targets the prime minister's financial history.

In a humorous nod to a memorable scene from The Big Short where Margot Robbie describes mortgage bonds from a bubble bath, comedian Jon Richardson delves into Mr. Sunak's career while enjoying a beer in his own bath.

He transports the audience to 2007, during the time Mr. Sunak served as a partner at TCI, a hedge fund recognized for its "activist" shareholder strategy.

The investment group acquired shares in the Netherlands-based bank ABN Amro, holding a 2% interest as stated in a video by Labour, and "over 1%" as noted in a letter from the fund dated 2007.

Although it held only a minor share, it leveraged its position to insist that the bank be sold off, eventually to the Royal Bank of Scotland (RBS).

"According to Richardson, RBS spent billions to acquire the bank, consequently taking on a significant amount of additional sub-prime mortgage assets."

Burdened by debt, RBS's agreement played a significant role in pushing it to the brink of failure, leading to a necessary government rescue valued at £45.5 billion.

Richardson alleges that Mr. Sunak profited immensely from a transaction that contributed to the financial crisis, costing British taxpayers dearly.

The Conservatives criticized the video, labeling it as inaccurate and dismissing it as deceptive propaganda from the Labour Party.

Labour and the Conservatives are presenting conflicting narratives, so Sky News examined the records that are publicly accessible to uncover the facts.

The hedge fund earned close to £900 million in profits during the two years prior to the economic downturn.

Based on filings with Companies House, the company posted profits of £321 million in the fiscal year concluding in August 2007, which was Mr. Sunak's inaugural year as a partner, and then saw an increase to £555 million in profits the subsequent year.

On average, each member of the hedge fund team earned £5 million over the course of two years.

Mr. Sunak departed from TCI in 2009 when he was 29 years old. He then went on to become the MP for Richmond (Yorks) in 2015.

What does TCI stand for?

The Children's Investment Fund, commonly abbreviated as TCI, was established by the billionaire Sir Chris Hohn.

The company and its founder are well-known for their discreetness.

TCI is recognized for its assertive investment strategy, focusing substantial resources on a select few companies.

In 2009, Sir Chris disclosed to a select committee that TCI had taken positions against British banks during the financial downturn, though he described these moves as "relatively minor."

TCI, a pioneer among hedge funds, allocates a share of its fees to philanthropic causes and backs organizations through The Children's Investment Fund Foundation that address poverty in Africa and Asia.

It cut off official ties with the foundation roughly ten years ago but still continues to provide support.

Sunak's restless evenings amid the 2008 financial crisis

During a 2019 conversation with BBC's Nick Robinson, Mr. Sunak discussed his experience in the banking sector during the financial crisis.

"He mentioned that experiencing it was quite stressful."

"Being accountable for others' financial reserves and witnessing them diminish rapidly can be an intensely stressful experience."

He mentioned that the anxiety led to several nights without sleep.

He described it as an "unprecedented period."

"Such a massive disruption in the financial markets had not been seen since the 1930s. Both the rapidity and magnitude of the events were unparalleled."

Journeying from Southampton to California, Passing Through Oxford

Rishi Sunak, born in 1980 in Southampton, is the oldest sibling among three children in a family of Punjabi heritage.

Mr. Sunak's father practiced as a general practitioner, while his mother managed a local pharmacy. He assisted his mother by handling the accounting tasks.

He studied at Winchester College, the oldest public school in England, where he distinguished himself by becoming the first head boy of Indian descent and served as the editor of the school's newspaper.

He later described his time at the boarding school as an "intellectually transformative" period that set him on a new path.

Mr. Sunak pursued his education in philosophy, politics, and economics at Lincoln College, Oxford University, where he earned a first-class degree.

He dedicated his time to the investment club instead of student politics during his college years, focusing early on pursuing a career in investment.

It was reported that he had received job proposals from investment banks even before completing his second year at Oxford.

After completing his studies in 2001, Mr. Sunak began his career at the investment bank Goldman Sachs, where he served as

He went on to earn an MBA from Stanford University in California, which is also where he encountered his future spouse, Akshata Murty.

Discover further details on Sky News: The 12 prominent Conservative figures who might lose their seats in the upcoming General Election poll tracker.

A hedge fund incorporated in the Cayman Islands

In 2009, Mr. Sunak departed from TCI to establish a hedge fund named Theleme Partners.

In the 2022 Conservative leadership contest, Sky News anchor Kay Burley pressed Mr. Sunak on his potential personal gains from tax havens.

He promptly responded with a "no".

She continued, questioning: "The venture capital firm, Theleme Partners, which you helped establish, was registered in the Cayman Islands. Just for clarification, did you receive any benefits from this?"

Mr. Sunak responded, "I have never gained any financial advantage and have consistently paid the standard taxes required in each place I have resided.

"The segment of operations in the Cayman Islands that you mentioned is not within my purview. I am employed by a company that operates globally across various locations, however, I am not involved with that particular branch."

Burley questioned him about receiving payments from the offshore company, which Mr. Sunak once again refuted.

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Reaction from Conservatives to Labour's promotional clip

Following the release of Labour's video, a spokesperson for the Conservative Party responded by stating, "This is inaccurate."

"This video is a profoundly troubling and deceptive piece of propaganda from the Labour Party, showcasing their hostility towards the business community."

They did not provide responses to inquiries regarding Mr. Sunak's personal involvement in the transaction that led to ABN Amro being acquired by RBS, nor did they confirm if he was aware of the deal.

TCI was contacted to give a statement.

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