Labour given £4m from tax haven-based hedge fund with shares in oil and arms

The Labour Party’s largest-ever donation came from a Cayman Islands-registered hedge fund with shares worth hundreds of millions of pounds in fossil fuels, private health firms, arms manufacturers and asset managers.

While the £4m donation by Quadrature Capital is the sixth-largest in British political history, it is noteworthy not just for its size, but also its timing.

Electoral Commission records suggest Labour received the donation in the one-week window between former prime minister Rishi Sunak announcing the general election and the start of the ‘pre-poll reporting period’ in which all political donations over £11,180 had to be published weekly, rather than the quarterly norm.

This means that despite being made on 28 May, Quadrature’s generous donation was published by the Electoral Commission only last week, more than two months after Labour won the election.
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The party has received more than £8m from businesses or people linked to the financial industry since Starmer became leader in 2020 and now boasts two multi-million-pound donors from the world of hedge funds; Quadrature and Taylor, who has managed several billion-dollar funds over his career.

While Quadrature had not donated to Labour before May, one of its senior employees has contributed significantly to the party under Starmer. Daniel Luhde-Thompson, a strategic adviser at the firm, has given the party more than £500,000 this year, according to the Electoral Commission.
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Last year, the Guardian reported that despite donating to environmental charities through its climate foundation, Quadrature had holdings in fossil fuel companies worth more than $170m. The paper highlighted three holdings in particular with major polluters: ConocoPhillips, Cheniere Energy and Cenovus Energy.

[O]penDemocracy’s analysis of the firm’s latest SEC filings shows that Quadrature has since increased its holdings in Cenovus, which was this year fined millions for an oil spill that released 250,000 litres into the Atlantic Ocean. Quadrature has scaled back its holdings with the other two firms but has taken up a major $67m stake in ExxonMobil, one of the largest oil and gas producers in the world.
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UK accounts filings for the firm show profits before tax of more than £230m in the financial year ending 31 January 2023, but paid corporation tax of only £5.3m. As is noted in the accounts, had the firm paid the standard rate of UK corporation tax of 19% during that period, this would have amounted to more than £43m.