Hedge fund managers search for £300bn treasure at bottom of sea
The hunt to return more than £300billion of silver and gold currently at the bottom of the ocean to the British coffers is on.
Leading the charge are swashbuckling hedge fund managers and City financiers with cash to burn and a taste for adventure.
They include Spectator-owning money manager Paul Marshall, who founded Argentum Exploration – a specialist salvage firm – and Philip Reid, a former banker with Merrill Lynch, and chairman of rival explorer Britannia's Gold.
The two are financiers, but it is their passion for finding lost British treasure that unites them.
The expeditions are a rich man's game – long, expensive and with no guarantee of uncovering a haul. But like many adventurers before them, the chance of a discovery is too powerful a reward.
Sunken treasure: The hunt to return more than £300billion of silver and gold currently at the bottom of the ocean to the British coffers is on
The monetary prizes can be lucrative but there is also a sense of patriotism to the expeditions – harking back to the days when British explorers ruled the waves.
Reid told The Mail on Sunday: 'I am determined to be the man who went and got back Britain's gold'.
So what are they looking for?
Shipments of gold and silver were sent to America during the two world wars to pay for goods and munitions, but were often sunk by German U-boats.
Many were sunk by submarines lying in wait in shallow waters off Ireland in a bid to choke off the UK's ability to import and export.
The rate of attrition was so high that Lloyd's of London refused to insure the ships, meaning they were underwritten by the British Government, still the technical owner of the treasure.
Research shows that 7,500 vessels carrying about £300billion in today's money were lost.
For Britannia's Gold, founded eight years ago, 2025 could be a key year. Its target is a wreck it does not want to name off the north-west coast of Ireland, where it has completed four phases of investigation. The firm hopes to extract the cargo early next year.
Marine operations manager Will Carrier said crews face practical challenges such as 'cutting through eight inches of steel in the pitch black'.
Should the expedition be successful, then the loot will be taken to a secure location, and the firm will negotiate a price with the UK Government for its return.
After covering costs, the proceeds will be shared among investors.
Reid says funding comes from 'major investors who can afford the very considerable cost of salvage', such as family offices, sovereign funds, institutional investors and hedge funds.
He says: 'It's basically backed by very rich individuals who find it fun. There's huge attraction to the everyday investor, but with respect, they're not the ones we want.'
He explains: 'Increasingly this is seen as an attractive way of finding gold that would cost a fortune to find on land. But being right and being successful is no easy business.'
Adventurer: Paul Marshall
One of the major issues is that ownership of the loot when it is found is not always clear cut as Marshall found out.
He is head of one of the world's largest hedge funds, Marshall Wace, which manages £50billion in assets, and he owns a big stake in broadcaster GB News.
Last week, he snapped up the Spectator magazine for £100million, completing the next stage of his ambition to control a big swathe of the UK's conservative and rightwing media outlets. He is still in the running to buy The Daily and Sunday Telegraph with the second round of bids due by September 27.
But with Anthony Clake, a partner at the hedge fund, Marshall is also one of the leading funders of deep-sea treasure hunts. According to company filings, Marshall controls Argentum Exploration, which was incorporated in 2012.
He thought he had struck gold in 2017 when Argentum retrieved 2,364 silver bars from the wreck of the passenger ship SS Tilawa.
The ship was sunk in 1942 en route to South Africa by a Japanese submarine with the loss of 280 lives, and there it remained for seven decades. But after the find, the firm spent seven years wrangling with the South African government, arguing it was owed a substantial salvage figure.
In May, the UK's Supreme Court sided with Pretoria, saying it did not owe Marshall payment for the silver, which had been bought by South Africa from the Indian government in 1942. The sides reached a settlement independently.
Clake, who has been involved in about 30 salvages, said earlier this year: 'I don't do this for a living.'
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