Steven Mnuchin’s Surprising Post-Political Career: From Treasury Secretary to Billion-Dollar Dealmaker
Following the end of Donald Trump’s presidency, his former Treasury secretary, Steven Mnuchin, took a break from the public limelight, much like other ex-Cabinet members. However, instead of returning to the familiar routines of TV interviews, company boards, and academia, Mnuchin stunned everyone by making a $1 billion investment in a struggling bank, New York Community Bank.
Mnuchin’s Unexpected Return to the Spotlight
Typically, after leaving their government roles, former cabinet members choose more low-key careers. But Mnuchin, nine months after Biden’s inauguration, established Liberty Strategic Capital, a private equity firm specializing in investing in global technology companies. Up until recently, the firm had only made headlines due to its minority stake in Lionsgate, a production studio behind popular shows such as “Nurse Jackie” and “Mad Men.”
From Hollywood to Banking: Mnuchin’s Diverse Background
Mnuchin’s background includes financing Hollywood productions like “Avatar” and “Batman v. Superman: Dawn of Justice.” His past ventures, ranging from the entertainment industry to private equity, reflect his diverse experience. Liberty Strategic Capital’s other investments are primarily focused on cybersecurity.
The New York Community Bank Investment: A Turning Point
Last week, Mnuchin’s Liberty Strategic Capital made a significant investment in New York Community Bank. The firm contributed $450 million, with the remaining $550 million coming from other private equity firms and unidentified institutional investors. This deal was not an act of benevolence, as Mnuchin had a history of buying distressed financial institutions. In 2009, he led the group that bought failed subprime lender IndyMac.
Mnuchin’s History with Distressed Financial Institutions
After the Federal Deposit Insurance Corporation (FDIC) took over IndyMac following a run on deposits, Mnuchin’s group bought it for pennies on the dollar and renamed it OneWest. The bank faced criticism over its foreclosure practices, leading to millions in fines paid to customers. However, Mnuchin ultimately sold the bank to CIT Group for $3.4 billion in 2014 and received a sizeable severance package.
Mnuchin’s Ambition: Buying TikTok
Just one week after the New York Community Bank investment, Mnuchin announced that he was assembling a team of investors to make a bid for TikTok. This news came a day after the House passed a bill to either ban or force the sale of the Chinese-owned social media giant to a US-based owner. Mnuchin, who served in the Trump administration, believed TikTok was worth a significant amount despite its potential unprofitability.
The Challenges of Acquiring TikTok
ByteDance, the parent company of TikTok, may never agree to a sale due to Chinese government regulations. The company considers TikTok a sensitive technology and has expressed opposition to selling it to a foreign buyer. Mnuchin’s team would also face legal challenges if they attempted to acquire TikTok without Chinese approval.
Saudi Arabia’s Role in Liberty Strategic Capital
Adding another layer of complexity to the situation, Mnuchin’s firm received $1 billion in seed money from Saudi Arabia. The Saudi Public Investment Fund, which currently holds a substantial stake in Meta (a TikTok rival), has not yet invested in ByteDance.
The Road Ahead: Uncertainty and Complexity
Despite the challenges, Mnuchin is determined to find a solution for acquiring TikTok without transferring critical technology to China. The bill passed by the House must be approved by the Senate, and even if it is signed into law, there will likely be legal challenges in implementing a TikTok ban. In the meantime, Mnuchin’s Liberty Strategic Capital continues to make headlines with its ambitious investments.
Conclusion
Steven Mnuchin, the former Treasury secretary under President Trump, has surprised many with his post-political career moves. His new firm, Liberty Strategic Capital, made a splash with a $1 billion investment in New York Community Bank and has now set its sights on acquiring TikTok. The road ahead is uncertain, but one thing is clear: Mnuchin’s impact in the business world continues to be felt.
Additional Resources
For more information on Steven Mnuchin and Liberty Strategic Capital, please refer to the following resources:
- team to buy TikTok
