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The U.S. may be home to some of the world\u2019s biggest investors, but unlike other countries such as Saudi Arabia and Singapore, the federal government doesn\u2019t have an investment arm of its own. <\/p>\n
That might change if Donald Trump is elected to a second term as president. Speaking at the Economic Club of New York on Thursday, Trump called for the creation of a sovereign wealth fund\u2014a term that describes state-owned organizations that operate like hedge funds or private equity firms, pursing different financial strategies such as buying up stock in public companies or backing startups and other private companies.<\/p>\n
In his remarks, Trump kept the proposal vague, saying the fund would invest in \u201cgreat national endeavors for the benefit of all of the American people\u201d and arguing that other countries have sovereign wealth funds, but \u201cwe have nothing.\u201d He added that the government could name its investing firm something different than a \u201csovereign wealth fund,\u201d which he said may not be \u201cappropriate.\u201d <\/p>\n
While Trump may be looking to other countries as inspiration for his idea, the creation of sovereign wealth funds has typically coincided with budget surpluses, often as a result of oil booms. One of the first examples<\/a> was Kuwait, which created an investment authority in 1953 to manage revenue from its oil, as well as Norway\u2019s Norges Bank Investment Management in 1967 and the Abu Dhabi Investment Authority in 1976, all to manage surplus oil revenue.<\/p>\n Even the U.S. has its own home-grown fund born out of oil money, with Alaska establishing one in 1976 that has yielded an annual payout to every state citizen since 1980. In 2023, every Alaskan\u2014including children\u2014received<\/a> $1,312. <\/p>\n In recent years, sovereign wealth funds\u2014especially from Asia and the Middle East\u2014have become major players in the tech industry. Temasek, a Singaporean investment company that counts the country\u2019s government as the sole equity shareholder, has backed top public companies such as Microsoft<\/a> and Nvidia<\/a>, as well as private companies\u2014including, disastrously<\/a>, FTX. Temasek also backs<\/a> other funds, including the OpenAI investor Alpha Intelligence Capital, which is closing a $250 million second fund.<\/p>\n Another prominent example is Saudi Arabia\u2019s Public Investment Fund, which owns a venture arm called Sanabil. Top U.S. funds including Andreessen Horowitz, Coatue, and KKR<\/a> have drawn scrutiny for receiving<\/a> Saudi capital from Sanabil, especially after the assassination of journalist Jamal Khashoggi by agents of the Saudi government. <\/p>\n Without additional context from Trump, it\u2019s unclear how the U.S. sovereign wealth fund he proposed would operate, especially without a clear source of funding\u2014or direction for capital investments.<\/p>\n Matt Bruenig, a progressive lawyer and founder of the think tank People\u2019s Policy Project, has previously proposed<\/a> a \u201csocial wealth fund for America,\u201d which he posted again on X after Trump\u2019s remarks. Under Bruenig\u2019s plan, the fund would tackle wealth inequality by issuing every American a share of ownership and accumulating assets such as stocks, bonds, and real estate. Citizens would not be permitted to sell their shares, but would earn a universal basic dividend, similar to the Alaskan model. <\/p>\n The sovereign wealth fund was not Trump\u2019s only proposal at his speech on Thursday. He also announced he would establish a \u201cgovernment efficiency commission\u201d headed by Elon Musk that would be tasked with completing an audit of the government. <\/p>\n \u201cI look forward to serving America if the opportunity arises,\u201d Musk posted on X. <\/p>\n<\/div>\n\u2018America First\u2019<\/h2>\n
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