Former White House chief of staff Mick Mulvaney to open hedge fund focused on financial stocks

• Former White House chief of staff Mick Mulvaney plans to launch a hedge fund focused on financial-sector stocks.
• The firm, named Exegis Capital, will leverage Mulvaney's experience in government to find opportunities linked to legislation and regulation, he said in an appearance on S&P Global's "Street Talk" podcast.
• Investors "like to think the market moves on fundamentals" but policy out of Washington plays an increasingly important role, Mulvaney added.
• Mulvaney, now serving as special envoy to Northern Ireland, aims to open the fund on January 1 with investing veteran Andrew Wessel.
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Mick Mulvaney, former White House chief of staff, is starting a hedge fund aimed at leveraging his knowledge of financial industry regulation.

In an appearance on the "Street Talk" podcast hosted by S&P Global Market Intelligence, Mulvaney said he's launching a fund with investing veteran Andrew Wessel. The firm, named Exegis Capital, will focus on financial-sector stocks with a combination of long and short positions.

Investors "like to think the market moves on fundamentals" but government policy is playing an increasingly large role in driving markets, the former chief of staff said.

"Politics is going to be a very turbulent thing in the near future, and I think it creates opportunities for those who understand how Washington works," Mulvaney said.

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President Donald Trump appointed Mulvaney as special envoy to Northern Ireland in March after he served as chief of staff for more than a year. Former Representative Mark Meadows took Mulvaney's role in the White House. Mulvaney now serves as a special government employee and plans to continue in the role while founding Exegis, a source familiar with the matter told Politico.

The former chief of staff highlighted recent market rallies as backing up his argument that fundamentals now play second fiddle to Washington. Stimulus progress and positive coronavirus drug news have repeatedly pushed major equity indexes higher in recent weeks despite continued economic pain, he said.

That trend will surely continue, and those with experience in government will know how to best position themselves with respect to future legislation and regulation, Mulvaney added.

"Not a lot of folks get it. Not a lot of folks understand, OK, this person has hired this staffer to run this subcommittee, what is that going to mean for what kinds of legislation you're seeing come out?" he said.

Mulvaney and Wessel began raising capital for the fund about a month ago, Wessel said on the podcast. The two aim to open the fund on January 1, and will do so whether Trump or Vice President Joe Biden wins November's presidential election.

Other government players moved into the market recently as stocks rebounded from their virus-induced lows. Former House Speaker Paul Ryan is set to hop on the "blank-check" bandwagon with the special-purpose acquisition company Executive Network Partnering, The Wall Street Journal reported on August 20. Ryan will serve as the firm's chairman. The SPAC plans to raise $300 million in an initial public offering and trade under the ticker ENPC.

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