A former Morgan Stanley executive has reportedly been tapped to lead it.
The Trump Administration is moving forward with its plans to create a sovereign wealth fund, as the Commerce Department is set to name someone to lead it.
According to Bloomberg, the Commerce Department will name Michael Grimes, the former head of global technology investment banking at Morgan Stanley, to lead the fund. Grimes spent the past nearly 30 years with Morgan Stanley before leaving in February to take a senior advisor role in the Commerce Department.
While the appointment has not been confirmed, multiple outlets, including Bloomberg, are reporting it, according to sources.
It follows and executive order in early February by President Donald Trump announcing plans to create a sovereign wealth fund.
“It is the policy of the United States to maximize the stewardship of our national wealth for the sole benefit of American citizens. To this end, it is in the interest of the American people that the Federal Government establish a sovereign wealth fund to promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish economic security for future generations, and promote United States economic and strategic leadership internationally,” the February 3 executive order states.
The order calls for the Treasury and Commerce departments to develop a plan for a sovereign wealth fund, to be submitted to the president within 90 days.
“Such plan shall include recommendations for funding mechanisms, investment strategies, fund structure, and a governance model. The plan shall also include an evaluation of the legal considerations for establishing and managing such a fund, including any need for legislation,” the order states.
What is a sovereign wealth fund?
Many countries, as well as U.S. states, have sovereign wealth funds. They are funds owned by the states, or countries, that use reserves, surpluses, or other sources of government funds to invest in assets, like stocks, bonds, property, alternative investments, gold, crypto or other financial assets. The returns are then used for a variety of purposes, including building up reserves or investing in certain strategic initiatives.
Texas, for example, has two sovereign wealth funds that are funded by surpluses from the oil and gas industries. They are used to fund public education. Alaska, Nevada, Louisiana, Oregon, Utah, North Dakota, and others also have their own sovereign wealth funds.
The details on how the new U.S. sovereign wealth fund will be funded, or what it will invest in, are not known, as it is currently being developed.
“We’re going to create a lot of wealth for the fund,” Trump said back in February, reported the BBC. The president also mentioned during the 2024 presidential campaign that it could be funded by tariffs, among other sources.
CNBC reported that it could be, in part, backed by tariffs, according to sources. However, the Bloomberg story said it would not be back by tariffs.
The Bloomberg story did say, according to sources, that the fund could be used to invest in several areas, including critical minerals, rare earths, manufacturing, technology, defense technology and defense sourcing.
