Trumps Treasury pick Scott Bessents hedge fund reaped windfall during 2022 downturn: He does best when there is chaos

President-elect Donald Trump’s pick for Treasury Secretary operates a hedge fund that reaped a massive windfall two years ago — even as global markets sagged under the punishing weight of inflation, according to a report.Scott Bessent’s investment firm Key Square Capital saw its flagship fund score a 29% return in 2022 by betting that high rates of inflation would persist longer than what the Federal Reserve predicted.By contrast, the S&P 500 — the stock market index that tracks the performance of 500 of the largest publicly traded companies in the US — fell 18% that year, when the annual inflation rate rose to a whopping 8.3%, the highest since 1981.Key Square Capital’s strategy at the time was to short fixed-income assets and tech stocks that were generating low revenue, according to the Financial Times.“Scott is very cerebral and a global opportunist who does best when there is chaos,” a person close to Bessent told FT.“He can play multiple [financial] instruments in order to position himself on top of the rest…during peaceful times he can struggle to find a winning angle.”Bessent’s hedge fund has also raked in double-digit percentage profit so far this year, according to Reuters.Key Square Capital this year made successful bets that the stock market and the US dollar would rise.But the hedge fund has also experienced lean years under Bessent’s leadership.Bessent, who was George Soros’ money manager when the left-leaning, Hungarian-born financier became a billionaire by shorting the British pound during the 1992 “Black Wednesday” sterling crisis, founded Key Square in late 2015.The company quickly raised $4.5 billion — which included $2 billion from Soros.

During its first year, Key Square’s flagship fund scored a 13% return on its investments, according to Reuters.The hedge fund correctly wagered that the British pound would decline in the wake of the “Brexit” vote which led to the United Kingdom’s departure from th...