Scott Bessent, the billionaire hedge fund manager picked by President-elect Donald J. Trump to be his Treasury Secretary, plans to divest dozens of funds, trusts and investments in preparation to become the nation's top economic policymaker .
These plans were released Saturday along with the release of an ethics agreement and financial disclosures that Mr. Bessent filed ahead of his Senate confirmation hearing next Thursday.
The documents reveal the extent of Mr Bessent's wealth, whose assets and investments appear to be worth more than $700 million. Mr. Bessent was previously the top investor of billionaire liberal philanthropist George Soros and was a major Republican donor and adviser to Mr. Trump.
If appointed Treasury secretary, Mr. Bessent, 62, will drive Mr. Trump's economic agenda of cutting taxes, rolling back regulations and imposing tariffs as he tries to renegotiate trade deals . He will also play a central role in the Trump administration's expected embrace of cryptocurrencies such as Bitcoin.
Although Mr. Trump won the election by appealing to working-class voters hounded by high prices, he has turned to wealthy Wall Street investors such as Mr. Bessent and Howard Lutnick, a billionaire banker he took over as Minister of Trade. to lead his economic team. Linda McMahon, another billionaire, has been chosen as Secretary of Education, and Elon Musk, the richest man in the world, heads an unofficial agency known as the Department of Government Efficiency.
In a letter to the Treasury Department's ethics office, Mr. Bessent outlined the steps he would take to “avoid any actual or apparent conflict of interest in the event that I am confirmed for the position of Secretary of the Treasury Department.”
Mr. Bessent said he would close Key Square Capital Management, the investment firm he founded, and resign from his Bessent-Freeman Family Foundation and from Rockefeller University, where he was chairman of the investment committee.
The financial disclosure form, which lists the value of his assets, shows that Mr. Bessent owns as much as $25 million in farmland in North Dakota, which generates income from soybean and corn production. He also owns a property in the Bahamas worth a whopping $25 million. Last November, Mr. Bessent put his historic pink mansion in Charleston, S.C., on the market for $22.5 million.
Mr. Bessent sells several investments that may pose potential conflicts of interest, including an exchange-traded Bitcoin fund; an account in which the renminbi, the Chinese currency, is traded; and his stake in All Seasons, a conservative publisher. He also has a margin loan, or line of credit, with Goldman Sachs of more than $50 million.
As an investor, Mr. Bessent has long bet on the dollar's rising strength and has bet against, or “shorted” the renminbi, according to a person familiar with Mr. Bessent's strategy who spoke on condition of anonymity to discuss his portfolio. . Mr. Bessent rose to fame in the 1990s by betting on the British pound, netting his company, Soros Fund Management, $1 billion. He also made a high-profile bet on the Japanese yen.
Mr. Bessent, who will oversee the U.S. Treasury market, owns more than $100 million in government bonds.
Cabinet officials are required to divest certain holdings and investments to avoid potential conflicts of interest. While this can be a tricky process, it has some potential tax benefits.
The tax code contains a provision that allows securities to be sold and capital gains taxes on such sales to be deferred if all of the proceeds are used to purchase government bonds and certain money market funds. The tax continues to be deferred until the securities or money market funds are sold.
Even if ethical guidelines are adhered to, questions of conflict of interest may still arise.
Trump's first-term Treasury Secretary, Steven Mnuchin, divested his Hollywood film production company after joining the administration. However, when he negotiated a trade deal with China in 2018 – a key market for the US film industry – ethics watchdogs raised questions about whether Mr Mnuchin had faced conflicts for selling his stake in the company to his wife.
Mr. Bessent was chosen for the Treasury Department after an internal battle among Mr. Trump's aides over the job. Mr. Lutnick, co-chairman of Mr. Trump's transition team and the CEO of Cantor Fitzgerald, made a late pitch to secure the role of Treasury secretary for himself before Mr. Trump picked him as Commerce secretary.
During that fight, which came to public attention, critics of Mr. Bessent distributed documents discrediting his performance as a hedge fund manager.
Mr. Bessent's most recent hedge fund, Key Square Capital, launched to much fanfare in 2016 and amassed $4.5 billion in investor money, including $2 billion from Mr. Soros, but now manages far less. A fund he managed in the early 2000s also performed unremarkably.
