WASHINGTON, Feb 3 (Reuters) - U.S. President Donald Trump signed an executive order on Monday ordering the creation of a sovereign wealth fund within the next year, saying it could potentially buy the short video app TikTok.
If created, the sovereign wealth fund could place the U.S. alongside numerous other countries, particularly in the Middle East and Asia, that have launched similar funds as a way to make direct investments with government dollars
.
The text of the executive order was sparse on details, and simply directed the Treasury and Commerce Departments to submit a plan for such a fund within 90 days, including recommendations on "funding mechanisms, investment strategies, fund structure, and a governance model."
Typically such funds rely on a country's budget surplus to make investments, but the U.S. operates at a deficit. Its creation also would likely require approval from Congress.
"We're going to create a lot of wealth for the fund," Trump told reporters. "And I think it's about time that this country had a sovereign wealth fund."
Trump had previously floated such a government investment vehicle as a presidential candidate, saying it could fund "great national endeavors" like infrastructure projects such as highways and airports, manufacturing, and medical research.
Administration officials did not say how the fund would operate or be financed, but Trump has previously said it could be funded by "tariffs and other intelligent things."
Treasury Secretary Scott Bessent told reporters the fund would be set up within the next 12 months.
"We're going to monetize the asset side of the U.S. balance sheet for the American people," Bessent said. "There'll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people."
One approach would be to convert the U.S. International Development Finance Corp (DFC) to function similar to a sovereign wealth fund, which the Trump administration reportedly considered in recent months, Bloomberg News reported. The DFC is a government agency that currently partners with private parties to finance projects in the developing world.
Trump announced Friday he was nominating Benjamin Black to head that development agency. Black, a managing partner at investment firm Fortinbras Enterprises, is the son of Leon Black, the co-founder of asset management firm Apollo Global Management.
If created, the sovereign wealth fund could place the U.S. alongside numerous other countries, particularly in the Middle East and Asia, that have launched similar funds as a way to make direct investments with government dollars
.
The text of the executive order was sparse on details, and simply directed the Treasury and Commerce Departments to submit a plan for such a fund within 90 days, including recommendations on "funding mechanisms, investment strategies, fund structure, and a governance model."
Typically such funds rely on a country's budget surplus to make investments, but the U.S. operates at a deficit. Its creation also would likely require approval from Congress.
"We're going to create a lot of wealth for the fund," Trump told reporters. "And I think it's about time that this country had a sovereign wealth fund."
Trump had previously floated such a government investment vehicle as a presidential candidate, saying it could fund "great national endeavors" like infrastructure projects such as highways and airports, manufacturing, and medical research.
Administration officials did not say how the fund would operate or be financed, but Trump has previously said it could be funded by "tariffs and other intelligent things."
Treasury Secretary Scott Bessent told reporters the fund would be set up within the next 12 months.
"We're going to monetize the asset side of the U.S. balance sheet for the American people," Bessent said. "There'll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people."
One approach would be to convert the U.S. International Development Finance Corp (DFC) to function similar to a sovereign wealth fund, which the Trump administration reportedly considered in recent months, Bloomberg News reported. The DFC is a government agency that currently partners with private parties to finance projects in the developing world.
Trump announced Friday he was nominating Benjamin Black to head that development agency. Black, a managing partner at investment firm Fortinbras Enterprises, is the son of Leon Black, the co-founder of asset management firm Apollo Global Management.
