Brexit’s Big Short: How Pollsters Helped Hedge Funds Beat the Crash

At 10 p.m. on June 23, 2016, Sky News projected the words “IN OR OUT” across the top of a London building as an orchestral score ratcheted up the tension. “In or out—it is too late to change your mind,” declared Adam Boulton, the veteran anchor, seated in a makeshift studio across from Big Ben. … After the dramatic intro, Boulton jumped straight in with a huge exclusive, declaring he had “breaking news.” Nigel Farage, the global face of the Brexit campaign, had given Sky what sounded like a concession. …

Behind the scenes, a small group of people had a secret—and billions of dollars were at stake. Hedge funds aiming to win big from trades that day had hired YouGov and at least five other polling companies, including Farage’s favorite pollster. … These hedge funds were in the perfect position to earn fortunes by short selling the British pound. Others learned the likely outcome of public, potentially market-moving polls before they were published, offering surefire trades. …

Bloomberg’s account is based in part on interviews over seven months with more than 30 knowledgeable current and former polling-company executives, consultants and traders, nearly all of whom spoke only on the condition they not be named because of confidentiality agreements. Pollsters said they believed Brexit yielded one of the most profitable single days in the history of their industry. CONT.

Cam Simpson, Gavin Finch & Kit Chellel, Bloomberg