A billionaire donor to Donald Trump stands to profit from the rescue of Thames Water, as his hedge fund pushes the government to accept a deal that critics say would allow the utility to keep polluting with impunity.
Paul Singer, the 81-year-old founder of Elliott Investment Management, donated $5m (£3.73m) to Make America Great Again Inc, Trump’s Super PAC, and tens of millions more to Republican congressional candidates in 2024. His son, Gordon Singer, who runs Elliott’s London office, is the point person for the Thames Water negotiations. In 2024 Gordon attempted to donate nearly £2,000 to Robert Jenrick’s failed Conservative leadership bid; the Electoral Commission ruled the donation “impermissible,” reportedly because his address was not up to date, and the money was returned.
Elliott is a leading member of the consortium known as London & Valley Water, which also includes Silver Point Capital, BlackRock and M&G. The group is attempting to take over Thames Water through a multibillion-pound restructuring. Thames Water, the UK’s largest water company, has accumulated debt of approximately £17.6bn since privatisation – some estimates put it closer to £20bn – and is at an impasse with ministers and creditors over a rescue deal to stave off collapse.
If the deal goes through, Singer – whom Bloomberg has called “the most feared investor in the world” – will be among those controlling the water supply of 16 million people in London and the Thames valley. His firm’s average annual returns of 14% reflect a modus operandi of targeting underperforming public companies, overhauling boards, ruthlessly cutting costs and forcing restructurings, often leading to a sale.
Aggressive demands and a high-interest loan
The creditors’ demands have been characteristically aggressive. They are asking for Thames to be let off fines for four years – potentially worth up to £1bn – and for leniency on environmental measures, including pollution, leakage and other performance targets imposed a year ago. A tidy profit is already built into the deal: the creditors provided Thames with a £3bn loan carrying an annual interest rate of up to 9.75%, to be paid for through customer bills.
Thames Water insists customers will not bear the cost. A spokesperson said: “As we have previously stated and was upheld by the high court last year, customers will not pay the cost of the interest on the Super Senior Funding.” However, a third of each customer bill currently goes towards servicing the company’s wider debt, and Thames had aimed to use part of the new funding to pay the interest. That has not happened, and Thames is due to run out of funds in November, meaning customers could end up footing the bill after all.
The London & Valley Water consortium has submitted a five-year turnaround plan involving £20.5bn in investment and operational spending, including measures to cut pollution and leaks, alongside a financial restructuring that would write off a significant portion of debt and inject £3bn to £4bn of new equity. A revised bid in March 2026 proposed injecting £3.35bn of new equity and up to £6.55bn in new debt. Yet key sticking points remain: the amount of new equity creditors must provide, the scale of debt haircuts, and regulatory performance targets.
Environment Minister Steve Reed has insisted that Thames Water must face the same penalties for sewage-related fines as other utilities. The company already holds the lowest possible environmental rating – one star – from the Environment Agency, and in May 2025 Ofwat imposed a record fine of £122.7m for environmental breaches, including sewage spills, and for breaking rules on dividend payments. Ofwat stated that fine would be paid by the company and its investors, not by customers.
Singer’s history of hardball tactics is well known. He once ordered the impounding of an Argentinian navy ship after the country failed to pay its debts, and his company has been accused of catalysing Argentina’s bond crisis by aggressively pursuing those debts. More recently, Elliott was part of a consortium that secured a winning bid for Citgo, the US-based subsidiary of Venezuela’s state-owned oil company, for $8.8bn two months before Trump arrested President Nicolás Maduro. That sale was forced by a Delaware court and was reported to be at a “massive discount” – Venezuela had valued Citgo at $18bn. A subsequent Delaware court approval in December 2025 saw an Elliott affiliate, Amber Energy, acquire Citgo for $5.9bn, a price Venezuela is now trying to block by arguing the asset’s valuation has increased significantly. More money is expected to be made as US companies control the oil produced, which is unlikely to be subject to sanctions.
Political threats and public backlash
The rescue deal is under threat from political uncertainty. Andy Burnham, the Mayor of Greater Manchester who is tipped to become the next prime minister if he wins the byelection in Makerfield next month, wants to bring water companies back under public control. Lena Swedlow, deputy director of the centre-left campaign group Compass, which has close links to Burnham, said: “These people do not have any interest or business running a water company. They are not utility providers, they are vulture capitalists. They should be allowed nowhere near resources that are important for our health, our planet and our national security.”
Cat Hobbs, of the campaign group We Own It, said: “Trump wants control over NHS drug prices, and his mega donor Singer wants control over our water. ‘Absolutely not’ should be the answer of any government that considers itself patriotic.”
Clive Lewis, the Labour MP for Norwich South and a leading advocate of returning the water industry to public ownership, said handing Thames to Singer and Elliott would be like “throwing red meat to the wolves”. “The fact that he is known as a vulture capitalist should tell you everything about how inappropriate this deal is … these kinds of people are there to suck the lifeblood out of our utilities and public services, and this deal should not be rushed through.”
Government sources say negotiations with the creditors have been intense. Ministers are terrified of a Liz Truss-style bond market meltdown, which the negotiators warn will happen if the deal fails and Thames Water falls into special administration. The chancellor, Rachel Reeves, is said to have been spooked, and government sources say she has been vehemently against such an outcome. She has urged creditors to find a “market-based solution” rather than resorting to a special administration regime, a form of temporary nationalisation for essential service providers. The government has appointed FTI Consulting to prepare contingency plans for a SAR.
The regulator Ofwat has been heavily criticised for opening the door after 2010 to allow private equity and international hedge funds to take over England’s water companies, enabling short-term profit at the expense of vital infrastructure upgrades and environmental protection. Seven out of ten privatised water and sewerage companies are now controlled by private equity investors, and a similar number are in foreign ownership. Ofwat itself is set to be abolished and replaced by new regulators as part of government reforms.
A spokesperson for the London & Valley Water consortium said: “Experienced turnaround investors have worked constructively and in good faith with regulators and officials to design an ambitious, long-term turnaround plan which holds Thames Water to account and delivers a step-change for customers and the environment.”
A government spokesperson said: “The government will always act in the national interest on these issues. The company remains financially stable, but we stand ready for all eventualities, including applying for a special administration regime if that were to become necessary.”
Elliott Investment Management declined to comment.
