An Inside Look at Scaramucci’s Playbook

There have been many words and phrases used to describe former White House Communications Director, Anthony Scaramucci: Opportunist, Nut Job, Unstable, Charismatic; seemingly used descriptions delivered by his fans and foes.

But there is one word everyone will agree on when it comes to “The Mooch”: Smart.

Many believe the recent dust-up between Scaramucci and President Trump is purposeful and necessary.  However, the primary reason why the former Goldman Sachs Investment Banker is picking a fight with his former boss has nothing to do with politics and everything to do with raising capital for his new Opportunity Zone Fund.

Scaramucci’s firm, SkyBridge Capital, created the product as a result of the 2017 Trump tax legislation.  In it, investors are permitted to sell investments without paying capital gains taxes on the profits for several years if the gains are invested in designated “opportunity zones” in inner cities.

“It has an opportunity to create job growth and infrastructure rebuilding,” Scaramucci said earlier this year to Worth Magazine.

The fund closes September 30th and SkyBridge is targeting $1 billion by year-end.  The firm believes it can eventually raise $3 billion if the idea takes off.

However, it doesn’t appear Scaramucci and Company are even close to fulfilling their funding objective.

Early data from CoStar, and reported by Biznow, shows Opportunity Zone Funds are only bringing in about 10 percent of their target capital, and Reonomy data shows the level of investment into opportunity zone communities didn’t significantly increase during the program’s first year.

“To think the program is a magic pill to create consistent job growth, rent growth and property appreciation across all 8,700 zone is a fallacy,” OPZ Bernstein principal Craig Bernstein said this month to Biznow.

It’s highly likely Scaramucci feels like he has egg on his face because of the time and resources devoted to this program, which would eventually be positive support between the former Communications Director and the President if proven successful.  However, with the clock ticking to a September 30th close, The Mooch may feel it necessary to try and stimulate investors to consider an allocation into his new fund by shouting (Tweeting) media-grabbing headlines.

Or, he knows the new fund is going to be a bust and this is his way to seek vengeance for falling for the President’s sales pitch.  Either way, Scaramucci is no dummy and he realizes his brand—including SkyBridge Capital’s Opportunity Zone Fund—will be front-and-center in the media as we close out the third quarter of 2019.

By: Todd M. Schoenberger of Wellington & Co. Hedge Fund Research and Author of No Lie Lives Forever

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