Wall Street donors' Republican spending fails to sway U.S. midterm outcome

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Wall Street donors fail in midterms

Highlights

Sixteen of the 20 largest Wall Street donors back Republicans, but Democratic candidates win key races despite substantial conservative fundraising.
The Senate Leadership Fund receives $17 million from Stephen Schwarzman, $14.5 million from Paul Singer, and over a third of its $463 million spending backs Ken Paxton, who loses by more than 12 points in Texas.
Post-election, donor optimism fades as Republicans lose stronghold states, causing high-profile backers to reconsider future strategies and revealing early splits with party leadership.

Donor spending and election setbacks

As reported by the Financial Times, many of the country’s richest investors poured money into Republican campaigns in an effort to preserve conservative control of Congress, but the strategy delivers little return as Democratic candidates win key races. The publication’s analysis says 16 of the 20 biggest donors backed conservative candidates, many of whom supported lower taxes, lighter regulation and backing for Israel.

Among the biggest beneficiaries of hedge fund money is the Senate Leadership Fund, the Republicans’ fundraising vehicle for the upper chamber. It receives $17 million from Blackstone chief executive Stephen Schwarzman, $14.5 million from Paul Singer, $10 million from Ken Griffin and $1 million from Apollo chief executive Marc Rowan.

The Republican Senate fund directs more than a third of the $463 million it spends nationwide through October 15 to support Ken Paxton, who loses the Texas Senate race by more than 12 points. GOP strategists say losses in states long seen as Republican strongholds, including Kansas and South Carolina, could push wealthy backers to rethink how they deploy money in the next election.

Strains emerge between donors and Republicans

Some Wall Street figures are initially optimistic on election night, but their tone changes as results become clear. One hedge fund manager tells the Financial Times on Tuesday evening that bettors on Kalshi are underestimating the chances that Republican challenger Bruce Blakeman could defeat incumbent Democrat Kathy Hochul in New York’s gubernatorial race.

Dan Senor, chief public affairs officer at Singer’s Elliott Management, says on Tuesday morning after voting in New York that he backs Republicans across the ballot and urges others to vote early. Roughly a day later, he describes the results on X as a “stunning political blow for Republicans”, while a new podcast episode recorded on Wednesday morning is titled “A Blue Tsunami”. Hedge fund managers such as Dan Loeb and Bill Ackman, who often criticise Democrats on social media, are notably quiet on Wednesday.

Vice-president JD Vance says GOP voters will return if the party ends the war against Iran, prioritises the cost of living, puts America first and changes its relationship with Israel. Billionaire investor Cliff Asness, who gives $2 million last month to a Super Pac aligned with Senate GOP leader John Thune, responds on social media that Vance’s first, second and fourth points amount to “‘blame the Jews”.

The exchange points to an early split between some mega-donors and the Trump administration. Ian Vandewalker, senior counsel for the Brennan Center for Justice, says rising wealth in the U.S. has given certain groups outsized influence in elections, risking damage to core democratic norms, but he does not expect this week’s setback to reduce major political giving in 2028.

In our earlier article on Republicans’ late advertising surge ahead of the November midterms, we detailed how the party ramped up spending as polling tightened even in races once seen as safe. We noted that the push extended to traditionally Republican states such as Kansas and Florida, while strategists also pulled back in tougher battlegrounds like North Carolina and Georgia as inflation and fuel costs weighed on voters.

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