THE UK media has at last woken up to the intimate and nefarious relationship between Boris Johnson, his merry band of Brexiteers

and a strange group of City financial pirates known as hedge funds. It is these hedge fund manipulators who financed Johnson’s Tory leadership campaign, as well as the 2016 Leave campaign itself.

Last November, Boris netted a cool £94,500 for a two-hour speech delivered to New York-based hedge fund outfit GoldenTree Asset Management. GoldenTree specialises in trading “distressed” assets such as the Johnston Press, owner of The Scotsman. A few weeks after Boris addressed the fund, ownership of Johnston Press passed to its bondholders – including GoldenTree.

The biggest “hedgie” cheerleader for Boris is billionaire Crispin Odey, founder of Odey Asset Management. In October 2018, Odey told the Mail on Sunday that Johnson could rely on his financial backing to run for Number 10 if Theresa May resigned. He was quoted as saying: “I think Boris would be excellent once he became leader.”

Among other City hedge fund managers backing Boris are David Lilley of RK Capital, Jon Wood of SRM Global, and Johan Christofferson of Christofferson, Robb and Co.

What are hedge funds? The term was invented in the 1940s by a maverick Australian (later American) investor named Alfred Winslow Jones. Jones wasn’t content just to invest in existing bonds and stocks and hope they rose in value. Instead, he invented a special kind of fund that “hedged” its investment bets by offsetting growth stocks by short-selling others. In essence, this is like laying off a bet in horse racing. He bet on a likely winner – but you simultaneously bet on another nag to lose. If you chose the right odds in each case, you collect no matter what. If your favourite loses by a nose, you still gain because you “hedged” by betting on another horse to come last.

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Normal fund managers such as Standard Life Aberdeen invest savers’ money in safe assets such as bonds and FTSE 100 company shares. Hedge funds, on the other hand, exist to take risks. They invest in high-risk asset classes with the intent to make super-profits. Example: in 2018, the hedge fund run by Boris’s mate Odey made a staggering 53% return on its investment.

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How could Odey make such a killing when most of us are lucky to make a few per cent on our saving accounts? Hedge funds such as Odey’s do what is called “shorting” the market. This involves borrowing shares the hedge fund doesn’t actually own (for a small fee) but which it thinks are about to fall in market value. The hedge fund then sells these borrowed shares to buyers willing to pay the current market price. When (if) the share price drops, the hedge fund can re-purchase them but at the new lower cost. It then “returns” the shares it borrowed to start with, pocketing the difference between the old price and the new lower one.

Now here’s the trick: the act of “shorting” a given stock (or currency) on a big scale – selling lots at the same time – usually sends its price falling through the floor, as supply exceeds normal demand. Hey presto, the hedge fund has created the very circumstances it needed to return a profit. It’s as if laying off on a particular horse to lose actually causes it to fall – because you doped it. Except shorting shares is perfectly legal.

Hedge fund billionaires such as Odey claim they benefit society – don’t laugh – because they weed out inefficient companies. The reality is very different. To make the extravagant returns they crave, hedge funds short not just obviously weak companies but whole industries. For instance, uber-Brexiteer Odey has been busy shorting a galaxy of UK retail chains, including Debenhams. This explains the implosion on the high street.

Odey’s next targets are high-street banks (worry for your deposit) and the pound (worry for inflation).

Here’s the killer: unlike banks, hedge funds are unregulated. They also register their HQs in tax havens such as Bermuda or Isle of Man. When it comes to paying your taxes, the hedge fund boys are the first out of the door. Who are these patriots? Intriguingly, most of the big hedge fund billionaires come from non-establishment backgrounds, which helps explain their populist, anti-Brexit politics.

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Take shaven-headed Jonathan Wood, who handed £50,000 to Boris for “office and staffing costs”, in preparation for his leadership bid. Typically for a UK hedge fund operator, Wood is an outsider to the British establishment. He was born in Yorkshire and studied at Loughborough rather than Oxbridge. Wood bought heavily into the ailing Northern Rock bank, betting Gordon Brown would bail it out. When the Treasury nationalised Northern Rock, leaving him out of pocket, Wood retaliated by donating £500,000 to the Tories at the 2010 election, in a bid to oust Brown from Number 10. He gave another half million to the Leave campaign in 2016 – its second-largest donation.

Where did this class of financial traders come from? Their roots lie in Margaret Thatcher’s privatisation programme in the 1980s. Thatcher sold off the nationalised industries for a song, to fund tax cuts. Of course, the big City banks made a killing, but Thatcherite financial deregulation also brought into being a new layer of financial cowboys from outside the establishment circle.

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Arron Banks made his living in fringe financial wheeling and dealing

Arron Banks is the son of an expat sugar plantation manager while Nigel Farage’s peripatetic father was a failed stockbroker turned antiques dealer. This new class made its living in fringe financial wheeling and dealing – Arron Banks by insuring commercial white vans and Nigel Farage by selling junk bonds.

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Looked down upon by snooty City types, it is no wonder this stratum has learned to hate the British establishment. That counts double for successful hedge fund billionaires such as Wood who are now rich enough and megalomaniac enough to buy power.

Always remember these hedge fund types have big psychological chips on their shoulders. As perennial outsiders, they thrive on market chaos and gyrating asset values on which they can take a punt. It’s their form of revenge.

Last month, hedge funds bet £7 billion to short the pound, in anticipation of Boris making no deal with Europe. If there is a hard Brexit, the hedge funds will make a financial killing.

Besides profit, there’s another reason why hedge fund managers want Brexit: because Europe dislikes shorting and wants to put the hedgies under tougher regulation. The EU’s new Alternative Investment Fund Managers Directive will severely limit hedge fund operations. Yet nothing in the EU is simple. As a result of the new directive, continental European banks will be free to steal clients away from US and UK hedge funds. The hedge funds blame the European Commission.

Remember this when folk tell you that Brexit is a cry for help from the English underclass. Bollocks! It is a carefully stage-managed campaign by British and US the hedge funds (the latter are big Trump donors) to keep their clients and their profits. And Boris Johnson is their frontman.