‘We must give something back to society,’ says financier
Top financiers set up London academy for philanthropy
FINANCIERS are overpaid and must give something back to society in charitable donations and work, according to one of Britain’s wealthiest hedge fund bosses.
Paul Marshall, the co-founder of hedge fund group Marshall Wace, issued his challenge to the City’s elite as he unveiled plans for a new Institute for Philanthropy at the London School of Economics.
The institute has been given £30million by the hedge fund chief, who planned it with banking veteran and fellow philanthropist Sir Tom Hughes-Hallett.
Speaking to The Mail on Sunday, Marshall, whose personal wealth has been estimated at £300million, said: ‘I think the financial sector is overpaid and there have been too many rewards for failure.
‘There is a challenge for everyone in the sector to think carefully about how they are rewarded and how they should steward that money.
‘The way society rewards people creates very skewed outcomes. It is beholden on those of us who have been beneficiaries of that to think very carefully.’
Courses at the Marshall Institute will include an MBA in philanthropy with the aim of making charitable giving and social enterprises more effective, as well as researching and developing techniques for fundraising and delivering charity work.
Marshall and Hughes-Hallett, who quit the City to lead Marie Curie Cancer Care, held talks with a number of universities before basing the institute close to the LSE’s central London campus.
Marshall is a founding trustee of children’s charity ARK (Absolute Return for Kids).
He is also chairman of ARK schools, which operates a chain of academies in the UK.
Starting this institute is one of the things I always wanted to do before I die
My wife said to me “We now have more than enough money. Get a proper job”
PAUL MARSHALL, one of Britain’s most successful hedge fund managers and a man worth an estimated £300million, likes to quote Methodist preacher John Wesley. He says: ‘I am a great believer in the phrase: “Gain a lot, save a lot, give a lot.”’
It’s a paraphrase of Wesley’s sermon on the good life, and Marshall appears to be sticking to it. His earnings are clearly a lot, but he has also just endowed a new faculty at the London School of Economics – The Marshall Institute – with a cheque for £30million.
The Institute – which will conduct research into the field of philanthropy – is the brainchild of Marshall and Sir Tom HughesHallett, a former investment banker turned philanthropist and charity executive.
‘Yes, I was a horrible investment banker,’ admits Hughes-Hallett reflecting on the demonisation of his former profession. Marshall concurs light-heartedly: ‘Yes, I am a horrible hedge fund manager.’
I am meeting the two men at the offices of Marshall Wace, the hedge fund group co-founded by Marshall in 1997. The plush suites of the art deco building overlook the Thames and, beyond that, the City.
The aim of this pair, who recognise they are part of a world that has become a byword for greed and excess, is to turn the LSE into a global centre for philanthropy, studying how charities can be more effective, and nurturing a genera- tion of philanthropic experts through a masters course.
‘A huge amount of money is ploughed into philanthropy,’ says Marshall, ‘and yet there is no qualification in the skills needed to run social and charitable enterprises.
‘None of the top 30 universities around the world offers a qualification in this. We will be the first and where better than London?’
Marshall, 56, describes the plan as ‘one of the things I always wanted to do before I die’. A meeting with Hughes-Hallett, who was thinking on similar lines, meant the moment came sooner than he expected.
Marshall outlines some of the things the institute will provide, asking: ‘If you are setting up a social venture and not trying to make a profit, how do you think about creating something that is going to last for years?
‘Another thing is monitoring and evaluation – which is absolutely critical – the discipline of monitoring your intervention and understanding its direct and longer term impact.
‘There isn’t the same measure as in business – there isn’t a profit measure – but you still have to have levels of accountability for what you are doing.’
The pair reflect two different aspects of the City. Marshall, with spiky hair and open neck shirt is very much in tune with the modern, informal style. Hughes-Hallett, four years his senior, with braces, tie and what he himself describes as a ‘plummy accent’, looks a little more old school.
After a successful banking career culminating at Flemings, which was sold to the US bank Chase Manhattan in 1999, Hughes-Hallett went on to head Marie Curie Cancer Care, where he had to raise £130million a year for the charity’s work, and on a number of other charitable groups.
He says he encounters on an almost daily basis examples of how difficult it can be for the charitably minded to give their time and money and actually know they are making a difference. He says: ‘Just last week I was invited to see a very successful businessman who has made a fortune out of creating apps. He’s made a lot of money. But he said he was finding it extremely difficult to give effectively.’
Researching, studying and teaching about these issues will form the core of the institute’s work.
Both Marshall and Hughes-Hallett will teach, and Hughes-Hallett will be chairman of the institute.
Headhunters have been appointed to find a dean, a job which HughesHallett says is almost unique, and for which there is ‘no obvious list of candidates’. The first students are expected to start work in 2016. They aim to have about 150 students on the MBA course by 2017 and more than 100,000 signed up for online courses.
The pair have come to philanthropy from very different places. Hughes-Hallett cites the birth of his son as a critical moment for him. He says: ‘The absolute turning point for me was my son, who was born with a stammer.
‘In 1996, when he was five, we took him to the Michael Palin Centre for Stammering Children and it changed his life. Now he’s a thundering great rugby type who only stammers when he’s really flustered. And now he gives his time to train people who stammer to get jobs.’
Hughes-Hallett went on to become the chairman of the Michael Palin Centre himself, but the direct experience of his son came at a critical juncture in his life.
He says: ‘That experience happened to coincide with Flemings being sold. My wife Jules sat down and she said “we now have more than enough money. Don’t even tell me we haven’t. Get a proper job”.
‘She was right. We had no money when we got married. We had plummy accents – but no money, and we were so happy then.’
So Hughes-Hallett spent 12 years at Marie Curie and has also been involved in a slew of other philanthropic ventures, including being trustee of the Esmee Fairbairn Foundation, a charitable trust created by his great uncle in 1962.
Hughes-Hallett was knighted for his philanthropic work in 2012.
His accent is indeed plummy and his background – Eton and Oxford – is to most eyes a privileged one. But he is endlessly self-deprecating and also frank about why he has immersed himself in what he regards as ‘public service’.
He says: ‘I want to serve the public but the reason I do it is – I am ashamed to say – because I enjoy it. It gives me great pleasure. I am not going to tell you I do it because it makes me a better person. I do it because I get an enormous amount of personal satisfaction.’
He thinks that many of his former peers in the City would do well to realise what they are missing. To those not already contributing their ‘talent or their treasure’ to philanthropic causes Hughes-Hallett has a simple comment: ‘They just haven’t discovered the most exciting thing that could be part of their lives.’
Marshall, also an Oxford graduate, had his interest in social issues formed by a political streak. In 2004 he co-edited ‘The Orange Book’ with Liberal Democrat MP David Laws (now Minister of State for Schools). The book is a compendium of Liberal Democrat philosophy. But politics is far from the agenda of the institute, which both of its co-creators insist must and will be apolitical.
Marshall’s major social enterprise has been co-founding the ARK or Absolute Return for Kids, a children’s charity which has worked around the world, but which now focuses much of its resources on academy schools in the UK.
Its ARK Academies are among the most successful in the UK and Marshall has been a non-executive director at the Department for Education since 2013. An interest and enthusiasm for the young seems to be a theme of Marshall’s thought.
‘The younger generation have huge ideals,’ he says approvingly. A view echoed by Hughes-Hallett, who says: ‘I think my children are much nicer than me.’
Marshall cannot resist a quip: ‘Yes they are,’ he adds, laughing.
Hughes-Hallett continues: ‘Paul and I have both been incredibly fortunate in our lives, we’ve done it by working inside the capitalist system. But I think for the next generation that will not be enough.
‘Corporate Britain has a lot further to go in demonstrating to this new generation it wants to attract that they are going to do more than just keep their shareholders happy.
‘They will want more than that.’