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Sir Keir Starmer has appointed one of the UK’s best connected City advisers as his point of contact with corporate executives and international investors, as the new prime minister seeks to deepen his party’s ties with business.
Varun Chandra, the managing partner of Hakluyt, a London-based consultancy founded by former MI6 intelligence officers, will become Downing Street’s special adviser on business and investment, Labour figures said. To take up the post, the 39-year-old has resigned from Hakluyt, which he has led since 2019, and will take a significant pay cut to work for the government.
Chandra, Hakluyt’s highest-paid director, was handed £2.1mn in the 12 months to June 2023, the most recent year for which it has filed accounts, according to Companies House filings.
His new role is set to be an important one for the new Labour government, which has made economic growth the centrepiece of its agenda and has sought to build close ties with executives.
With the public purse constrained, Starmer and chancellor Rachel Reeves are courting private investment from inside and outside the UK to fund new infrastructure in a departure from Starmer’s predecessor, Jeremy Corbyn.
Chandra’s networking abilities will now be put to the test as he seeks to maintain some of those links while ministers become more preoccupied by the day-to-day responsibilities of running the government.
Hakluyt said last year that it advises 40 per cent of the world’s most valuable companies and more than 15 of the top 20 private equity firms.
One of Chandra’s early tasks will probably be to manage relations with the private equity industry, with the new Labour government set to consult on its pledge to end a “loophole” that allows buyout executives to benefit from favourable tax treatment of the profits they make from successful deals.
Chandra once worked as an investment banker at the now-defunct Lehman Brothers and is close to Sir Tony Blair, having worked for the former prime minister for about six years from 2008 as he began to build his private advisory business following his exit from frontline politics.
He has been at the forefront of Hakluyt’s efforts to cast off its reputation for operating in the shadows and move into the mainstream of the professional services sector. The group, whose advisory board is chaired by former Tory leader Lord William Hague, gathers intelligence through a combination of research by its 200 staff and insights from a network of thousands of people with backgrounds in business and government around the world.
Companies then use this information on corporate, regulatory and geopolitical issues to assist decision-making in areas such as mergers and acquisitions. As part of its efforts to move deeper into Silicon Valley, Chandra launched Hakluyt Capital and raised about $50mn for the firm’s first-ever venture capital fund.
Chandra played a role in luring Sir Olly Robbins, the former Brexit chief negotiator, from Goldman Sachs to Hakluyt early last year, where he is responsible for corporate clients in Europe and the Middle East.
Robbins is now in a strong position to take up a senior Whitehall role in the new Starmer-led Labour government, potentially as cabinet secretary or as permanent secretary at 10 Downing Street. Likewise, Chandra hired Emily Benn, the granddaughter of Tony Benn and a well-connected Labour figure who is seen as a likely future MP.
The boss of one rival said that although he was sceptical of Hakluyt’s ability to expand given its model of relying on this network to gather intelligence, Chandra had been a very effective and impressive leader.
Downing Street’s business adviser post was previously held by Franck Petitgas, a one-time Morgan Stanley banker, under Rishi Sunak’s administration.
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