Donald Trump, the candidate, was blunt: “Hedge fund guys are getting away with murder.”
But Donald Trump, the President-elect, is going a bit easier on the hedge funders -- to huzzahs from the industry.
In Trump, hedge-fund types are finally getting their day in Washington. One of their own, Steven Mnuchin, is even a contender for Treasury secretary.
It’s a remarkable turnabout for a business that, at its height, came to symbolize an era of Wall Street hyper-wealth. After a painful run of scandals and investigations, industry veterans now hope Trump will bring a softer touch to the financial industry, if not rehabilitate its reputation.
“That nonsense is ending: the anti-banking cabal and the screed of hatred for people that live on Wall Street,” Anthony Scaramucci, a well-known money manager who is on the transition team, said last week following Trump’s victory.
Whether the financial industry will get everything it wants is anyone’s guess. On Wednesday, the President-elect took to Twitter to dispute reports that his team was in disarray. Adding to the turmoil, an early hedge-fund voice in the ranks -- Kevin O’Connor, general counsel to the billionaire Steven A. Cohen’s Point72 Asset Management -- abruptly left Trump’s fold.
Paulson, Mercer
But money managers like Scaramucci see reason for optimism. Mnuchin, a former hedge fund manager and partner and Goldman Sachs Group Inc., is a top candidate to lead Treasury; he served as Trump’s campaign finance chief. John Paulson, who made billions when the housing market collapsed, is an economic adviser; he was a Trump donor and has been pushing for changes to Fannie Mae and Freddie Mac, the U.S. mortgage giants.
Rebekah Mercer, the daughter of hedge-fund magnate Robert Mercer, is on Trump’s transition team. The elder Mercer’s Renaissance Technologies has been trying to resolve a multi-billion-dollar tax dispute with the Internal Revenue Service. Carl Icahn, the corporate-raider-turned-activist-investor, has also backed Trump, hoping the candidate will rein in Environmental Protection Agency rules, which he says harm refiners like CVR Refining LP, where he has a controlling stake. His wife, Gail, has been named to the inauguration team.
Financial-industry executives are pressing Trump to roll back a range of regulations that they say throttle business. A prime target is the post-crisis Dodd-Frank Act, which proponents say makes the financial industry safer. Others include rules requiring investment professionals to put their clients’ interest before their own when giving retirement advice.