In his day-to-day work as a hedge fund investor, Scott Bessent is a natural with numbers.
A native of South Carolina and founder of Key Square Group, he navigates turbulent global financial markets with equal ease. According to data from Bloomberg, one of his firm’s macro-focused funds was up 50 percent through June, while another was up 26 percent.
Bessent said Key Square turned bearish on “many high-flying” tech stocks last fall — about six weeks before the market peaked — while it allotted money to crude oil and other commodities as geopolitical tensions mounted and interest rates soared would.
“These are our kind of markets,” he said.
A product of Little River in Horry County and a Yale liberal arts major, Besent made his name on Wall Street at Soros Fund Management, where he went to work more than 30 years ago at the age of 29. He is credited with helping the New York firm hit a $1 billion profit in 1992 by placing a legendary currency bet against the value of the British pound.
“I went to Yale in 1980 and would always love to go back to South Carolina, but figured I’d have to live away for a while to appreciate what turned out to be true,” Bessent said earlier this month.
In 2000 he started his own business and in 2005 tried unsuccessfully to return home.
“I thought I was going to retire. But I got back into business,” he said.
Bessent later returned to Soros Fund Management as chief investment officer for several years before launching Key Square in what has been described as the biggest hedge fund launch of 2016.
The company is headquartered in Greenwich, Connecticut, but the founder and his family now call downtown Charleston home.
Bessent has kept a relatively low profile since re-establishing roots in the Palmetto State, although he made headlines about six years ago after paying $6.5 million for a former bed and breakfast called the Pink Palace and beginning a major renovation of the Historic East had battery property. The project received a Carolopolis Award from the Preservation Society earlier this year.
founding work
Besent, who has since settled in, wants to step into the public spotlight with two South Carolina-based philanthropic ventures.
“I’ve always tried to give back, wherever I have been,” he said.
In London, for example, where Key Square has an office, he is a supporter of the Prince of Wales Trust, which helps at-risk 11-30 year olds get their lives back on track. In New York, it’s the Harlem Children’s Zone, a non-profit organization that’s trying to break the cycle of intergenerational poverty.
Closer to home, Bessent, his sisters, and their late mother founded and endowed the rehabilitation center at Shriners Children’s Hospital in Greenville. He was also on the board of directors of the Spoleto Festival USA.
“For better or for worse, we’ve been in South Carolina a long time,” Besent said, noting that some of his ancestors were among the “original members” of the French Huguenot Church in Charleston.
His latest charitable initiative is the creation of two foundations with the goal of having them operational later this year. Both tie directly to his appreciation and his know-how for numbers and finances.
While details will be released later, he said the first will aim to help students from elementary through high school sharpen their math skills. Bessent hopes to eventually take the advanced tutoring program nationwide.
“I’m telling you, a large part of my success was the result of my very good mathematical training,” he said. “I’m not sure how that happened, but somehow the math is becoming politicized. We’re trying to take the politics out and put the rigor back in.”
The second foundation focuses on providing financial literacy in underserved areas, “in terms of future planning, best practices and things like that.”
“I think in this economic environment, with rising interest rates and high inflation, it’s even more important,” he said.
Not to mention the growing number of enticing deals shoppers are offering on TV and online.
“Whether it’s buy it now, pay later or crypto, these financial products are very complicated, very enticing and marketed in a very bad way,” he said.
‘connectivity’
Bessent said he is also working to bring more of his Key Square business interests to the Holy City. The hedge fund’s local office currently has four employees.
“I’m hoping within two years it will be 10 to 14 through a combination of hiring and having employees move out of Connecticut,” he said.
In addition, Bessent is working to “create a new breed of financial institution and locate it in South Carolina,” details later. It would not be owned by Key Square, but by his “Family Office,” which invests its personal money in various operating companies. Among other things, it is one of the largest owners of agricultural land in North Dakota.
“I’m very optimistic about farmland and agriculture,” he said
Bessent is also optimistic that more financial services firms like his, which once needed to be within earshot of Wall Street, will increasingly open offices in Charleston or move to Charleston entirely.
“Miami is hot right now and a lot of people are moving there,” he said, “but I think Charleston and South Carolina in general have a lot more going for them.”
It is usually characterized by lower living costs and individual quality of life factors. The game-changer is the technology-enabled, COVID-accelerated phenomenon of working from anywhere, Bessent said.
Charleston is already on the radar of some financial heavyweights. Wall Street powerhouse Goldman Sachs won’t be leaving Lower Manhattan anytime soon, but it’s worth noting that the big bank quietly established a Meeting Street outpost this year. In mid-2021, well-known stock picker Mario Gabelli’s New York-based GAMCO opened a small office in Mount Pleasant to accommodate the growing number of clients residing in the area.
In other words, word might get around.
“I think it’s one of those things where connectivity breeds connectivity,” Bessent said.
Comments are closed.