President-elect Donald Trump has nominated Scott Bessent, the founder of hedge fund Key Square Group, as Treasury secretary, signalling his preference for a seasoned financial expert and loyal ally to oversee US fiscal policy and economic strategy, according to reports.
Bessent, 62, who Trump has previously described as “brilliant”, was a leading contender for the role alongside former Federal Reserve Governor Kevin Warsh and private equity executive Marc Rowan. If confirmed, he will step into a pivotal role, navigating the nation’s economic landscape amid a growing economy, rising debt, and significant fiscal challenges.
In a statement, Trump hailed Bessent as “one of the world’s foremost international investors and economic strategists,” describing his career as emblematic of the American Dream. Trump emphasised Bessent’s alignment with his economic vision, including support for tariffs, deregulation, a revival in manufacturing, and energy independence.
In a statement, Trump said: “Scott will support my policies to drive US competitiveness and end unfair trade imbalances.
“Unlike in past Administrations, we will ensure than no Americans will be left behind in the next and Greatest Economic Boom, and Scott will lead that effort for me.”
Bessent’s hedge fund, Key Square Group, launched in late 2015 with $4.5bn, making it one of the largest hedge fund launches in history at the time—including a $2bn investment from George Soros, the legendary macroeconomic investor, for whom Bessent had previously helped generate billions during two tenures at Soros Fund Management.
Key Square’s debut year, 2016, saw its main fund surge by 13%, which the firm gained by correctly predicting the British pound’s decline following the Brexit referendum, according to sources familiar with the fund. Later that year, Bessent also capitalised on a US stock and dollar rally after Donald Trump’s election victory.
Despite its promising start, the fund faced challenges, losing 7% in 2017 and then seeing flat or negative returns between 2018 and 2021, according to disclosures from the New York City Police Pension Fund, an investor in the fund. However, Key Square rebounded with double-digit gains in both 2023 and 2024 and has posted overall double-digit growth since inception, according to a source familiar with the performance.
The firm’s uneven returns seem to have deterred many investors with assets under management (AUM) falling sharply from a 2017 peak of $5.1bn to just $577m by the end of 2023, and the number of institutional investors shrinking from 180 in 2017 to 20 by 2023, according to regulatory disclosures.
While Key Square’s hedge fund AUM has diminished, the firm has expanded into other areas, including providing investment ideas to other money managers, managing up to $1bn for a large macro investment firm, and running an advisory business for family offices, foundations, and endowments, including one client with $11bn in assets.
The firm collects fees from Ghisallo Capital, a $3.4bn spin-out incubated by Key Square.
As Treasury secretary, Bessent will be central to advancing Trump’s economic agenda, advising on fiscal policies and managing the US government’s financial challenges. These include a national debt exceeding $36tn, an annual deficit nearing $2tn, and debt service payments projected to hit $1.2tn by fiscal 2025.
Bessent will also oversee financial institutions, combat financial crimes, and spearhead economic policies aimed at bolstering US competitiveness. He will succeed outgoing Secretary Janet Yellen, the first woman to serve as both Treasury secretary and Federal Reserve chair.
