Hedge fund managers search for £300bn treasure at the bottom of the sea

The hunt is on to return the £300 billion-plus worth of silver and gold currently sitting on the ocean floor to the UK Treasury.

The attack is led by reckless hedge fund managers and City financiers with deep pockets and a taste for adventure.

They include Paul Marshall, an investment manager at Spectator who founded Argentum Exploration, a specialist salvage company, and Philip Reid, a former Merrill Lynch banker and chairman of rival explorer Britannia’s Gold.

The two are financiers, but it is their passion for finding lost British treasures that unites them.

The expeditions are a rich man’s game – long, expensive and with no guarantee of finding loot. But as with many adventurers before them, the chance of discovery is too great a reward.

The cash prizes may be lucrative, but there is also a sense of patriotism to the expeditions – a reminder of the days when British explorers ruled the waves.

Reid told The Mail on Sunday: ‘I am determined to be the man who brings back Britain’s gold.’

What are they looking for then?

During the two world wars, shipments of gold and silver were sent to America to pay for goods and munitions, but these were often sunk by German U-boats.

Many ships were sunk by submarines waiting in shallow waters off the coast of Ireland to cut off imports and exports from the UK.

The attrition rate was so high that Lloyd’s of London refused to insure the ships, meaning they were insured by the British government, who were still the technical owners of the treasure.

Research suggests that 7,500 ships with a current value of around £300 billion on board have been lost.

For Britannia’s Gold, founded eight years ago, 2025 could be a big year. The target is a wreck the company won’t name off the northwest coast of Ireland, where it has completed four phases of exploration. The company hopes to raise the cargo early next year.

Will Carrier, Navy operations manager, said crews face practical challenges, such as “sawing through eight inches of steel in pitch darkness.”

If the expedition is successful, the loot will be taken to a safe location and the company will negotiate with the British government a price for its return.

After the costs are covered, the proceeds are distributed among the investors.

According to Reid, the financing will come from “large investors who can afford the significant costs of a bailout,” such as family offices, sovereign wealth funds, institutional investors and hedge funds.

He says: ‘It’s basically backed by very wealthy individuals who like it. There’s a huge appeal to the average investor, but with all due respect, they’re not the ones we want.’

He explains: ‘Increasingly, this is seen as an attractive way to find gold that would cost a fortune to find on land. But being right and being successful is not an easy business.’

One of the biggest problems is that it is not always clear who owns the loot when it is found, as Marshall discovered.

He is head of one of the world’s largest hedge funds, Marshall Wace, which manages £50 billion in assets and has a major stake in broadcaster GB News.

Last week he bought the Spectator magazine for £100m, completing the next phase of his ambition to control a large swath of Britain’s conservative and right-wing media. He is still in the running to buy The Daily and Sunday Telegraph, with second-round bids due to close by 27 September.

But with Anthony Clake, a partner at the hedge fund, Marshall is also one of the top financiers of deep-sea treasure hunts. According to company documents, Marshall controls Argentum Exploration, which was founded in 2012.

He thought he had struck gold when Argentum recovered 2,364 silver bars from the wreck of the passenger ship SS Tilawa in 2017.

The ship was sunk by a Japanese submarine en route to South Africa in 1942, killing 280 people. It remained there for seven decades. But after its discovery, the company spent seven years wrangling with the South African government, arguing that it was entitled to a substantial amount of salvage.

In May, the British High Court sided with Pretoria. The court held that Pretoria did not owe Marshall payment for the silver that South Africa had purchased from the Indian government in 1942. The parties reached a settlement independently.

Clake, who has been involved in about 30 recoveries, said earlier this year: “I don’t do this for a living.”