Billionaire hedge fund manager Scott Bessent, President-elect Donald J. Trump's pick for Treasury secretary, is divesting from dozens of funds, trusts and investments in preparation for becoming America's top economic policymaker. I'm planning to.
Those plans were made public Saturday along with the release of the ethics agreement and financial disclosures Bessent filed ahead of his Senate confirmation hearing next Thursday.
The documents show the extent of Bessent's wealth, with assets and investments believed to be worth more than $700 million. Mr. Bessent was previously a top investor for billionaire liberal philanthropist George Soros and recently became a major Republican donor and Mr. Trump's adviser.
If confirmed, Mr. Bessent, 62, will be at the helm of Mr. Trump's economic agenda of tax cuts, deregulation and tariffs as he seeks to renegotiate trade deals. He will also play a central role in the Trump administration's anticipated introduction of cryptocurrencies such as Bitcoin.
Mr. Trump won the election by appealing to working-class voters who clung to high prices, but he also appealed to wealthy Wall Street investors such as Mr. Bessent and Howard Lutnick, the billionaire banker he selected to be secretary of commerce. I turned my attention. He will lead his economic team. Fellow billionaire Linda McMahon has been chosen as education secretary, and Elon Musk, the world's richest man, heads an unofficial agency known as the Department for Government Efficiency.
In a letter to the Treasury Department's Office of Ethics, Bessent outlined steps he would take to “avoid any actual or apparent conflicts of interest if I am confirmed to the position of Secretary of the Treasury.” Ta.
Mr. Bessent said he would close the investment firm he founded, Key Square Capital Management, and resign from the Bessent Freeman Family Foundation and Rockefeller University, where he was chairman of the investment committee.
Financial disclosure forms showing the range of his asset values reveal that Mr. Bessent owns $25 million in farmland in North Dakota and derives income from soybean and corn production. He also owns $25 million worth of real estate in the Bahamas. Last November, Mr. Bessent put his historic pink mansion in Charleston, South Carolina on the market for $22.5 million.
Mr. Bessent has sold several investments with potential conflicts of interest, including a Bitcoin exchange-traded fund. An account that trades the Chinese currency, the Renminbi. He also owns stock in All Seasons, a conservative publisher. He also has a more than $50 million margin loan, or line of credit, with Goldman Sachs.
As an investor, Mr. Bessent has long bet against the dollar and bet against the yuan, or “shorted” it, said a person familiar with Mr. Bessent's strategy who spoke on condition of anonymity to discuss his portfolio. . Bessent gained notoriety in the 1990s when he made $1 billion for his firm, Soros Fund Management, by betting on the British pound. He also made a high-profile bet against the Japanese yen.
Bessent, who will oversee the U.S. Treasury market, owns more than $100 million in Treasury bills.
Ministers will be required to divest certain holdings and investments to avoid potential conflicts of interest. Although this can be a tedious process, there may be some tax benefits.
The tax law includes a provision that allows the sale of securities and the deferral of capital gains taxes on the sale if the entire proceeds are used to purchase Treasury securities and certain money market funds. Taxes continue to be deferred until the security or money market fund is sold.
Even if ethical guidelines are followed, questions regarding conflicts of interest may arise.
Steven Mnuchin, who served as Treasury secretary during Trump's first term, sold his Hollywood film production company after taking office. But when Mr. Mnuchin was negotiating a trade deal with China, a key market for the U.S. film industry, in 2018, the ethics watchdog said there was a conflict because Mr. Mnuchin had sold an interest in the company to his wife. This raised the question of whether this is the case.
Bessent was chosen to head the Treasury Department after infighting over the position among Trump's inner circle. Mr. Lutnick, co-chair of Mr. Trump's transition team and chief executive of Cantor Fitzgerald, made a belated bid to secure the Treasury secretary post for himself before Mr. Trump nominated him to be secretary of commerce. went.
As the battle came to light, Bessent's critics circulated a document belittling his accomplishments as a hedge fund manager.
Mr. Bessent's latest hedge fund, Key Square Capital, was founded with much fanfare in 2016 and attracted $4.5 billion in investor money, including $2 billion from Mr. Soros, but now manages far less. few. A fund he ran in the early 2000s had similarly unremarkable performance.
