Trump Nominates Scott Bessent, Hedge Fund Founder, as Treasury Secretary

President-elect Donald Trump has nominated Scott Bessent, the founder of the hedge fund Key Square Group, as his pick for Treasury Secretary, signaling his preference for an experienced financial professional and trusted ally to guide U.S. fiscal policy and economic strategy, according to various reports.

At 62, Bessent was regarded as one of the leading candidates for the role, alongside former Federal Reserve Governor Kevin Warsh and private equity executive Marc Rowan. If confirmed, Bessent will take on a pivotal role in managing the nation’s economic future, which is marked by a growing economy, increasing debt levels, and complex fiscal issues.

In a statement, Trump praised Bessent as “one of the world’s foremost international investors and economic strategists,” noting that his career embodies the essence of the American Dream. Trump emphasized Bessent’s alignment with his own economic vision, which includes policies such as tariff implementation, deregulation, boosting manufacturing, and achieving energy independence. Trump also stated that Bessent would work to ensure the U.S. remains competitive globally and to address trade imbalances.

“Scott will support my policies to drive U.S. competitiveness and end unfair trade imbalances,” Trump said. “Unlike past administrations, we will make sure no Americans are left behind in the next great economic boom, and Scott will lead that effort for me.”

Bessent’s hedge fund, Key Square Group, was launched in late 2015 with $4.5 billion in assets, making it one of the largest hedge fund launches at the time. The fund attracted significant investment, including a $2 billion contribution from George Soros, the legendary macroeconomic investor for whom Bessent had previously worked. Under Bessent’s leadership, Key Square’s first year in 2016 saw its flagship fund gain 13%, fuelled by accurate predictions about the British pound’s decline after the Brexit referendum and a U.S. stock and dollar rally following Trump’s election win.

However, the fund's performance became uneven in subsequent years. After a 7% loss in 2017, Key Square struggled with flat or negative returns from 2018 to 2021, according to disclosures from the New York City Police Pension Fund, one of its investors. Despite this, the firm rebounded with strong double-digit gains in 2023 and 2024, posting overall double-digit growth since its inception.

Despite Key Square’s mixed returns, the firm has diversified, moving into other areas such as providing investment advice to other money managers, managing up to $1 billion for a large macro investment firm, and offering advisory services to family offices, foundations, and endowments. One of its clients is a foundation with $11 billion in assets. Additionally, the firm collects fees from Ghisallo Capital, a $3.4 billion spin-off incubated by Key Square.

As Treasury Secretary, Bessent will play a crucial role in advancing Trump’s economic agenda, advising on fiscal policies and addressing the U.S. government’s financial challenges. These challenges include a national debt surpassing $36 trillion, an annual deficit nearing $2 trillion, and projected debt service payments of $1.2 trillion by fiscal year 2025.

Bessent will also be responsible for overseeing financial institutions, combating financial crimes, and implementing economic policies to enhance U.S. competitiveness globally. He will succeed Janet Yellen, who became the first woman to serve as both Treasury Secretary and Federal Reserve Chair.