Business World

Monday 24 October 2016

Wall Street might just be warming to Trump

Dakin Campebell

Published 09/05/2016 | 02:30

Trump’s fundraiser Steven Mnuchin is Wall Street royalty. Photo: Bloomberg
Trump’s fundraiser Steven Mnuchin is Wall Street royalty. Photo: Bloomberg

A prince of Wall Street has cast his vote: Trump.

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Just days after Donald Trump locked up the Republican presidential nomination with a primary win in Indiana, Steven Mnuchin, a second-generation alumnus of Goldman Sachs Group, threw his weight, and connections, behind him.

Mnuchin will be Trump's national finance chairman, looking to tap a network of bankers and hedge-fund managers for campaign cash. His goal is to raise $1bn from donors of all stripes.

Thomas Barrack, founder and chairman of Colony Capital and a Trump supporter, called Mnuchin a "fresh, untainted face" in fundraising circles, and said his financial independence, earned at Goldman and as head of Dune Capital Management, was a plus.

"What may be perceived as a lack of expertise in the Republican Party, in this instance, is a big benefit," he said. "He doesn't owe anybody anything."

But Mnuchin has his work cut out. The appointment of someone prominent in an industry Trump has criticised exposed political fault lines, even as it signalled the candidate is trying to embrace a community that's played crucial roles in past elections and has largely given him the cold shoulder.

And it came as he struggles to gain broad support with establishment Republicans; House Speaker Paul Ryan said he's not ready to support Trump, and the last two Republican Presidents, George Bush and George W Bush, have no plans to attend the convention in Cleveland.

In several ways, it's surprising that Mnuchin was quick to get on board. He and his father, also a former Goldman Sachs partner, have donated in the past to Hillary Clinton.

And in this year's election, Goldmanites have been notably absent from list of donors to Trump, whose hallmark policies include expelling illegal immigrants and renegotiating trade deals. Trump has derided Mnuchin's peers as "hedge fund guys", vowing to end the carried interest loophole that gives them preferential tax treatment.

At the Milken Institute Global Conference in Beverly Hills last week, some of the industry's biggest donors said they won't support Trump, while others said they're still deliberating.

Ken Griffin, founder of $24bn hedge fund Citadel, is taking a wait-and-see approach, according to a source. Paul Singer, a New York hedge-fund billionaire who is among the most active Republican fundraisers, recently helped arrange an anti-Trump ad campaign. But he isn't backing Clinton, either, and will focus his contributions on the House and Senate, a source said.

Former US Representative Barney Frank, a Democrat who helped write the post-financial crisis Dodd-Frank Wall Street Reform and Consumer Protection Act, said he'd be amazed if Mnuchin could get many former colleagues to back Trump.

"It would surprise me if we saw a group of highly intelligent, sophisticated people who understand how the economy works line up for him," Frank said. "They are on the whole rational people, and I cannot think that they would have any sense of confidence."

Mnuchin has continued to cultivate his ties as a fixture at Goldman alumni events, which he typically attends with his father, Robert.

The Mnuchins bear a kind of Wall Street pedigree that's come under attack in this year's presidential race. Robert was known as a pioneer of institutional stock trading at Goldman in the 1960s.


He left in 1990 and became an art dealer with a New York gallery specialising in post-war works. Steven, the second-youngest of five siblings, attended the prestigious Riverdale Country School and then Yale University.

The younger Mnuchin trained at Salomon Brothers then joined Goldman in 1985. He spent 17 years there, climbing to partner and head of the mortgage department before joining Hank Paulson in the executive suite as chief information officer in 1999.

Mnuchin cashed in on Goldman Sachs's 1999 initial public offering and left in 2002 to join Lampert's hedge fund. A year later he started a fund with George Soros's money, and in 2004, he formed Dune with two other ex-Goldman partners.

Mnuchin said last week he's already gotten calls from ­fellow hedge-fund managers and ­others on Wall Street expressing their support. To those who worry about what a Trump presidency would look like, Mnuchin said he's convinced the candidate would place smart people in positions of power.

More people on Wall Street may take a fresh look at Trump now that he appears bound for the general election in November. "When I say Donald Trump's going to win, it's not that I'm wildly rooting for him, although I don't dislike Donald Trump," DoubleLine Capital's Jeffrey Gundlach said. "It's just like, I think it's going to happen."

And Mnuchin has sounded a confident note about Trump's prospects. "My expectation is there will be a lot of people on Wall Street who support Donald."


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