In late July in New York, a group of approximately 50 people stood outside the hedge fund BlueMountain Capital protesting against the firm’s purchases of Puerto Rican debt. Protesters carried anti hedge fund signs and one even had a papier mache vulture, to represent BlueMountain’s status as a vulture fund (a hedge fund that invests in weak debt, or debt that is about to default).
One of the group’s leaders attempted to request a meeting with a BlueMountain representative, but he was denied. BlueMountain Capital declined to comment.
Meet the Hedge Clippers. Backed by a Strong Economy for All Coalition, a collection of labor unions and community groups, and founded in early 2015, the Hedge Clippers are an activist group solely targeting hedge funds, instead of broadly attacking Wall Street. The decision to just focus on hedge funds was “driven both by the actual economy and that a bigger portion of the pie was going to the hedge fund managers” said Michael Kink, the Executive Director of Strong Economy for All Coalition. “We continually saw hedge fund guys on the other side of the equation.”
Even Donald Trump has jumped into the hedge fund managers discussion saying during an interview with Fox News’ Sean Hannity that hedge fund managers just “push around paper” and that they pay “peanuts” in taxes.
Indeed, the group’s mission statement says “The Hedge Clippers are working to expose the mechanisms hedge funds and billionaires use to influence government and politics in order to expand their wealth, influence and power.”
“Hedge fund managers aren’t just making money, but they’re also exercising political power,” said Zephyr Teachout, a backer of the Hedge Clippers, and former New York Democratic gubernatorial candidate.
Some of the issues that the Clippers focus on as they relate to hedge funds include corporate tax reform, charter schools, minimum wage and the Puerto Rican debt crisis. In July, protesters stood outside Third Point Capital manager Dan Loeb’s Hamptons house, where he was hosting a fundraiser for New York Governor Andrew Cuomo (Third Point declined to comment on this story). The group, which included many public school teachers, were protesting Loeb’s support of charter schools and Cuomo’s acceptance of hedge fund money. Corporate and personal tax reform will be one of their biggest issues moving forward.
“The economy works if you’re a hedge fund billionaire and doesn’t if you’re a waitress,” said Kink.
One of the first questions people ask about the Clippers is how they’re different from Occupy Wall Street, the 2008 movement protesting economic inequality. “Hedge Clippers do have some organic links to Occupy” said Kink. While Occupy did open a national conversation on income inequality, the movement physically was difficult to sustain, as protesters camped out in a park.
The Hedge Clippers are taking a different approach to keep the conversation moving. Protests at various hedge funds or homes belonging to hedge fund managers are a key part of their strategy. But the group also assembles “Hedge Papers,” lengthy reports criticizing hedge fund’s involvement in politics. Unlike Occupy Wall Street which relied more on its physical presence to convey a message, the Clippers have a comprehensive research, policy and publishing team.
The group has put out reports on a variety of topics ranging from fast food workers to tax liens in Baltimore to New Jersey governor and Republican presidential candidate Chris Christie for investing public pensions in hedge funds.
What might be the most surprising aspect of the Clippers is that, according to Teachout, folks who work on Wall Street have joined the campaign, showing that the group’s message is spreading beyond its traditional base.
And ahead of the 2016 election, the Hedge Clippers will not be targeting a specific candidate but instead will be shedding light on where the campaign contributions originate from. “If we make those contributors toxic, then we can connect to those candidates,” said Teachout. The Clippers have used this tactic already against Governor Cuomo for accepting contributions from hedge fund managers.
And hedge fund managers are ready to shell out for 2016. According to Federal Election Center records, Democratic candidate Hillary Clinton has received large contributions from Paul Tudor Jones, founder of Tudor Investment Corp, and Jamie Dinan, founder of York Capital Management, both past targets of the Clippers. Other candidates including Jeb Bush, Marco Rubio and Carly Fiorina have all received donations from hedge fund managers.
What’s coming up next for the group is an effort to go national. “We will have a more vigorous discussion of economic inequality and fairness,” said Kink.