Updates from Steven Mnuchin
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Japan’s SoftBank tracked Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala by backing a new $ 2.5 billion private equity fund set up by former US Treasury Secretary Steven Mnuchin eight months only after his departure.
Mnuchin launched Liberty Strategic Capital earlier this year after spending four years in the Trump administration. The fund is intended to focus on financial services and technology.
In a statement to the FT, SoftBank confirmed it has invested in Mnuchin’s private equity firm through its second Vision Fund.
A person familiar with the situation said the group’s decision to invest was influenced by Saudi Arabia’s PIF, the state fund administered by Crown Prince Mohammed bin Salman, which encouraged SoftBank to back Mnuchin.
It was not known exactly how much SoftBank contributed to the fund. Bloomberg, who first reported on Mnuchin’s fundraising this week, said most of the support came from investors in the Middle East, including the PIF.
Liberty Strategic said, “The company is not authorized to comment on an ongoing fundraiser, but it has a diverse investor base, including US insurance companies, family offices, sovereign wealth funds and other institutional investors. “
During his tenure as Secretary of the Treasury, Mnuchin maintained close ties with a number of Gulf countries. His last trip overseas in power, around the time of the Jan.6 attacks on the U.S. Capitol, involved stops in Saudi Arabia, Qatar, the United Arab Emirates and Kuwait.
At the end of October 2018, Mnuchin met Prince Mohammed, despite international outrage over the murder of journalist Jamal Khashoggi. Mnuchin nevertheless refused to attend the annual conference of the Future Investment Initiative in Riyadh, which aims to present the kingdom’s economic and social reforms.
The PIF and SoftBank have a close relationship. The Saudi fund contributed $ 45 billion to the Japanese group’s first Vision fund, making it the largest funder of the $ 100 billion tech investment vehicle and landed Yasir al-Rumayyan, who heads the PIF , a seat on the SoftBank Board of Directors from 2017 until the end of last year. . Mubadala of Abu Dhabi also invested $ 15 billion in the inaugural Vision Fund.
SoftBank, which is headed by billionaire Masayoshi Son, has been unable to attract external capital for its second Vision Fund and relies on internal funds for its investments.
Liberty Strategic made its first investment in July, leading a $ 275 million fundraiser by cybersecurity start-up Cybereason. The Israel-based company, which is also backed by SoftBank’s second Vision fund, said it would use the proceeds to fund its “hypergrowth” strategy and possibly seek a public listing.
In interviews about investing in Cybereason, Mnuchin said he was influenced by his tenure as Secretary of the Treasury, when he was tasked with protecting the financial services industry from cyber attacks.
Before joining Donald Trump’s campaign in 2016, Mnuchin was a familiar face on Wall Street.
Mnuchin rose through the top ranks of Goldman Sachs, where his father and brother also worked, eventually becoming the bank’s chief information officer. He left in 2002 and then started hedge fund Dune Capital Management and a movie studio called Dune Entertainment.
It has become common for former treasury secretaries to turn to private equity after leaving public service. John Snow, who served under George W Bush, has joined Cerberus Capital Management, while Tim Geithner, Barack Obama’s first secretary of the Treasury, is chairman of Warburg Pincus.
Jack Lew, Obama’s second Treasury secretary, is a managing partner at Lindsay Goldberg, and Hank Paulson, who also served under Bush, is executive chairman of a climate investment fund at TPG.