Investment banker Michael Grimes. — Bloomberg
NEW YORK: Star technology investment banker Michael Grimes, who left Morgan Stanley to take up a senior role in the US Commerce Department last month, is expected to lead the new US sovereign wealth fund that was unveiled by president Donald Trump, two people familiar with the matter say.
The discussions about Grimes leading the efforts to create and spearhead the fund are ongoing and plans could change, the sources said, requesting anonymity as the discussions are confidential.
The fund is expected to be backed by revenue from the so-called External Revenue Service, an agency Trump wants to create to handle income generated from tariffs on foreign imports, one of the sources said.
The Commerce Department, Grimes and the White House did not immediately respond to requests for comment.
The details, which have not been previously reported, highlight that plans for the sovereign wealth fund are beginning to take shape, despite questions about the feasibility of such an investment vehicle.
“It’s very smart to recruit someone like Grimes to do this, but the lesson of the CHIPS programme is that you need both Wall Street and government experts to navigate all the problems you are going to face,” said Jim Secreto, a former Treasury and Commerce official in the Biden administration, referring to a Biden-era subsidy programme to entice chipmakers to expand in the United States.
“Navigating the competing priorities and big personalities of the Trump administration will pose real implementation problems for investments that will get a lot of scrutiny from Congress and the public.”
Middle Eastern and Asian countries have launched similar funds as a way to make direct investments with government dollars. Typically, such funds rely on a country’s budget surplus to make investments, but the United States operates at a deficit.
Its creation would also likely require approval from Congress.
Grimes made a name for himself at Morgan Stanley after leading several high-profile technology initial public offerings, including Meta, Uber and Airbnb.
Adnan Mazarei, a fellow at the Peterson Institute for International Economics, raised concerns about future rules dictating what investments the fund can make and who will hold its managers accountable.
“I am concerned whether investment decisions will be properly made in a commercial way without risk of corruption,” he said. — Reuters
