Mnuchin’s Private Equity Fund Raises $2.5 Billion

The former Treasury secretary has attracted investment from Saudi Arabia’s sovereign wealth fund.,

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WASHINGTON — Steven Mnuchin has raised $2.5 billion at his new private equity fund, according to people familiar with the matter, attracting investments from sovereign wealth funds in the Middle East, including Saudi Arabia, where he traveled extensively as Treasury secretary.

The fund was started earlier this year by Mr. Mnuchin, who served as former President Donald J. Trump’s Treasury secretary for his entire term, and is focused on technology and financial services investments. Earlier this summer Mr. Mnuchin opened an office in Tel Aviv, Israel, and he has raised money from Saudi Arabia’s Public Investment Fund.

The fund-raising was reported earlier by Bloomberg News.

A former Goldman Sachs banker, film investor and hedge fund manager, Mr. Mnuchin is now leveraging the experience — and contacts — that he developed at Treasury to continue to build his wealth. When he assumed the Treasury role in 2017, his net worth was estimated to be about $400 million.

The scale of Mr. Mnuchin’s fund and its investments from countries where he traveled as Treasury secretary has raised questions about whether he used his government role to enrich himself.

Citizens for Responsibility and Ethics in Washington, a watchdog group, filed a lawsuit this year seeking information about the cost of Mr. Mnuchin’s travel to the Middle East, where he visited extensively while in office.

“Mnuchin should not have made any official decisions based on how he could profit off of them after leaving office — if he did, he must be held accountable,” the group said.

As Treasury secretary, Mr. Mnuchin steered the Trump administration’s economic policies, helping to craft the 2017 Republican tax cuts and representing the United States at many international forums. The tax law ultimately did not eliminate the special treatment for “carried interest” that benefits hedge fund managers and private equity executives after intense lobbying pressure from the industry.

Mr. Mnuchin also spent considerable time focusing on sanctions policy and took annual trips to the Middle East as part of efforts to start a Terrorist Financing Targeting Center that is based in Riyadh. While in Saudi Arabia, Mr. Mnuchin made multiple visits to the Future Investment Initiative, a business conference known as Davos in the Desert that is organized by the Public Investment Fund.

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While in Saudi Arabia, Mr. Mnuchin made multiple visits to the Future Investment Initiative, a business conference known as Davos in the Desert that is organized by the Public Investment Fund.Credit…Tasneem Alsultan for The New York Times

In 2018, after the brutal killing of Jamal Khashoggi, a Washington Post columnist, Mr. Mnuchin skipped the conference but still visited the country and met with the crown prince, Mohammed bin Salman. A U.S. intelligence report released in February held Prince Mohammed responsible for Mr. Khashoggi’s killing.

In January 2021, less than two weeks before leaving office, Mr. Mnuchin visited Saudi Arabia to meet with its finance minister and discuss counterterrorism and illicit finance. The Middle East trip, which also included stops in Egypt, Sudan, Israel, Qatar, the United Arab Emirates and Kuwait, was cut short amid Mr. Trump’s chaotic transition process.

Mr. Mnuchin has been returning to the Middle East this year while getting his fund up and running.

During a trip to Israel in June, he told the Jerusalem Post that he was setting up an office there because of the country’s strength in the cybersecurity technology and financial technology sectors, which will be focuses of the fund.

“We hope to be considered one of the best strategic partners in these areas,” Mr. Mnuchin told The Jerusalem Post.

In July, Mr. Mnuchin’s fund, Liberty Strategic Capital, led a $275 million investment in Cybereason, a cybersecurity firm that focuses on ransomware attacks.

Some former Treasury officials have joined Mr. Mnuchin’s new venture. They include Eli Miller, his former chief of staff, and Brian Callanan, who served as general counsel. Joseph F. Dunford, the former chairman of the Joint Chiefs of Staff is also a senior adviser.

A spokesman for Liberty had no comment on the status of the fund-raising.

Ethics groups have also been paying attention to the cost of Mr. Mnuchin’s travel since leaving office because he continued to receive Secret Service protection for an additional six months.

The Washington Post reported last week that the federal government had paid thousands of dollars for Secret Service agents to protect Mr. Mnuchin on his trips this summer to Israel and Qatar, where he stayed at the St. Regis Doha.

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