Rishi Sunak’s career in politics reflects his time in the City of London, where he was well liked, considered bright and hardworking. Yet in both professions, he has risen almost without trace.
“Rishi has impressed everyone and he has the potential to be a better chancellor than Sajid [Javid],” said one government official, referring to his sudden elevation to the top of Boris Johnson’s government this month.
“But he is very young, very untested and no one knows what his political judgment is like.”
As the new chancellor prepares for his first Budget since his sudden elevation on March 11, allies and opponents are also wondering about the 39-year-old’s decade working in the financial sector — first at Goldman Sachs and then at hedge funds TCI and its spin off Theleme Partners.
Mr Sunak joined TCI, a London-based activist fund founded by billionaire Chris Hohn, in 2006. The firm is famed for its aggressive and controversial campaign at ABN Amro in 2007 that led to the Dutch bank’s sale to Royal Bank of Scotland, Santander and Fortis.
The deal to buy ABN Amro was seen as a key factor behind RBS’s downfall during the financial crisis, when it was only saved from collapse by a £45.5bn bailout from the UK government. As chancellor he will now be in charge of the body that owns the government’s RBS shares.
But Sir Chris told the Financial Times that Mr Sunak was not involved in the ABN Amro takeover. “He had nothing to do with the bank investment. I led that.” He praised Mr Sunak for his “strong analytical skills, high integrity and low ego”.
Like all the investment team, Mr Sunak was a partner at TCI. He was, however, among the most junior analysts at the firm, said individuals familiar with the fund.
He worked under Snehal Amin, another former Goldman Sachs banker, and covered US stocks, scouring sectors such as railways and media, according to former colleagues.
Those who knew Mr Sunak at TCI describe him as sociable, chatty and easy to work with. He was “very smart [and] analytical” and had high integrity, said one. From an initial meeting “it was evident he was super high calibre”, said another person who knows the firm. Another hedge fund executive said “he must have been very bright” to work at TCI, known as one of London’s biggest and most successful hedge funds, albeit a demanding one. Sir Chris is known in the City as a hard taskmaster.
In 2009 Mr Sunak left TCI to join Theleme Partners, set up by former TCI manager Patrick Degorce. In a letter to Mr Sunak this month, the shadow chancellor John McDonnell raised questions over the ABN Amro deal and his connections to Mr Degorce, who was involved in the controversial Goldcrest tax avoidance scheme.
“Some may judge that your approach to the tax avoidance of close associates, and the use of tax havens by the companies mentioned above seems at best casual and at worst negligent,” Mr McDonnell said in his letter, seen by the FT.
Mr Degorce was ordered to pay back about £8m in tax after a tribunal found in 2013 that he had attempted to shelter millions of pounds in tax. HM Revenue & Customs alleged Mr Degorce sought to offset profits by buying film rights for artificially inflated figures, generating losses which would then reduce his tax burden.
But while Mr Sunak joined TCI in September 2006, according to company filings, one person who knows the firm said the “Goldcrest” scheme concerned Mr Degorce’s private money and had nothing to do with TCI fund money. Mr Degorce did not respond to requests for comment from the FT.
A Treasury official said Mr Sunak had no involvement with the Goldcrest scheme or the takeover of ABN Amro. Insiders accused the shadow chancellor of playing “tired old political games” and attacked Labour for their lack of “a credible plan to level up and unite the country”.
Mr Sunak’s first job out of Oxford university was as a junior analyst at Goldman Sachs. Colleagues at the American bank remember him as diligent and personable.
“Rishi is impressive, into the detail, well briefed, strategic in his thinking and a good listener,” one former colleague said.
His immediate superiors at Goldman were impressed with the young banker and marked him out as “something special” and were disappointed when he left in 2004, although he is remembered fondly. Reflecting on his promotion to the Treasury, one employee said “everyone is happy for him”.
His City career is likely to have made Mr Sunak a wealthy man. In 2009, he married Akshata Murthy, whose father NR Narayana Murthy founded outsourcing company Infosys and is India’s sixth-richest man.
His rapid political rise since entering parliament as MP for Richmond in Yorkshire in the 2015 general election has taken many Conservatives by surprise. This time last year, Mr Sunak was merely a parliamentary under secretary — the most junior ministerial rank. But his fulsome support for Mr Johnson paid off, with his appointment as Chief Secretary to the Treasury last July and now the top job.
Unusually for a chancellor, he does not have a natural group of supporters in the Conservative party. One prominent MP said: “I’ve never seen him stay late in the tea room or for drinks. He goes home to his family but no one is in any doubt he is ambitious.”
Some colleagues are uncertain about what motivates him. “He talks a lot about freeports and sound economics — beyond that it’s hard to say.”
Despite his inexperience and apparent lack of a clear political agenda, one senior figure in investment banking suggested Mr Sunak could make a better chancellor than Mr Javid, another former banker who was seen as a City insider.
“The press have been a bit unfair to him, presenting Rishi as a grasping kid who has worked for evil hedge funds,” the individual said. “He had a good education and is very wealthy, but he got where he is on the back of his intelligence.”
Meanwhile, George Osborne, one of his Tory predecessors who took over the Treasury at a similar age, said he was in no doubt he had the political skills to handle the job.
“I know Rishi and I know he’s more than up to the role, even if it’s come unexpectedly early,” Mr Osborne said. “He also knows what all chancellors know: spending the money is the easiest bit of the job; raising it is the hardest.”
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