Anthony Scaramucci Talks Trump, Opportunity Zones And How His White House Flameout Was Good For Business
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Anthony Scaramucci might be the living embodiment of the phrase, "There's no such thing as bad publicity."
Most casual readers of the news primarily know Scaramucci as the guy who, as he put it, "came into the White House on Day One with a chainsaw and a hockey mask," only to be fired 10 days later in one of countless surreal episodes from President Donald Trump's regime.
But even as he has re-entered the world of finance, Scaramucci believes that what matters most is that people have heard of him at all. He explained his reasoning by invoking the man to whom he tied his political fortunes and whose presidency he still appears on TV to defend.
"[President Donald Trump] had a nice line about it, where he said, ‘If 100 million people know you, and 50 million hate you and 50 million like you, that’s better than 100 million people not knowing you,’" Scaramucci said. "So as long as you can take the heat, it’s OK."
Scaramucci's hedge fund, SkyBridge Capital, launched a qualified opportunity fund late last year, and recently partnered with Westport Capital Partners to manage the fund with a target of $3B in investment. Even if his political dalliance and brash, confrontational style turn some potential investors away, Scaramucci said his phone has rung more than it would have had he never set foot in the White House.
Scaramucci spoke to Bisnow in a phone interview Tuesday to discuss the interdisciplinary SALT Conference for high net worth investors and other corporate leaders he founded through Skybridge in 2009. The next installment will be held in Las Vegas in May, and among its featured speakers will be Secretary of Housing and Urban Development Ben Carson, former U.S. Ambassador to the United Nations Nikki Haley and former White House Chief of Staff Gen. John Kelly, the man who gave Scaramucci the boot.
The following interview has been edited for length and clarity.
Bisnow: Why did you decide to make opportunity zones a focus of SALT?
Scaramucci: Well, there are a number of elements we’ll focus on, but because Skybridge is launching a fund in the opportunity zone space, we thought we would dedicate some time to opportunity zones. I also think it could be one of the largest investment ideas I’ve seen in the last 30 years. The notion that you could go into 8,700 different areas in the U.S. and pick up two types of tax benefits … I’ve never seen, in my 30 years of doing this, something that could be more motivating or incentivizing from an investment point of view.
And I think it’s new product, and people are getting up to speed with their knowledge of the product, and for our traditional clientele — high net worth individuals, pension funds, large-scale family offices — it’s a good way to educate them about what’s going on in that space. Aside from the Treasury’s [estimate], we think there’s $100B that can be added to the space in the next three to five years, and I think it can be very compelling for the United States in terms of the externalities of rebuilding and refurbishing areas, and providing jobs and job opportunities.
And I think that will be a central point [of the conference], as well as artificial intelligence, biotechnology and things that have been traditional topics: hedge fund investing, national and economic policy, so from an editorial standpoint, I always try to put together an eclectic mix, things that people would find unusual and entertaining, while giving them an opportunity to learn something. That’s what goes into the [agenda] and the speaker list for the conference.
Bisnow: I did go through the speaker list on the website, and based on some of the top-line speakers, I imagine you still have a good relationship with at least some parts of the executive branch of the government. So how did those guests come about?
Scaramucci: Well, Ben Carson and I are personal friends, Nikki Haley and I are personal friends — Gen. Kelly is an interesting case, because he fired me from the White House, and we didn’t have a personal relationship. But I called him after he left [office], to try to bury the hatchet. I thought, ‘There’s no point in you and I fighting,’ and I invited him to speak. So that’s the story with those three names.
There will be other names announced, but the one problem with acting government officials and people senior in the government is that I don’t want to put them up on the website yet. There are security reasons for that, and there are scheduling reasons; we want to make sure they’re 100% coming before we pull the trigger on [announcing their names]. But there will be a few more people coming from the Trump administration.
I talked to the president about it a few weeks ago, and he gave his support, and he gave a lot of people in his administration the green light to come to SALT. And that also happened during the Obama administration. We work to make this thing bipartisan. We have [former Obama National Security Adviser] Susan Rice coming, [Former Obama Senior Adviser] Valerie Jarrett and a few others. We’re working to get the [hosts of podcast] Pod Save America there, who are very strong liberals. So I like making this thing bipartisan.
Bisnow: You said you spoke to Trump a few weeks ago about the conference. How often have you spoken to him since you left the White House?
Scaramucci: That’s a good question. I haven’t really counted them up. I’d say I probably talk to him about once a month. I don’t bother him, but if there’s something I need or something I want to share with him or vice versa … I’m the one who principally does the calling, but he gave me a call to critique my performance on ["Real Time with Bill Maher"]. Here’s the thing: I keep an open mind and I gotta call him once in a while. I do a lot of media and I’m one of his advocates — I’m certainly a Trump supporter. So, I have to stay in the flow with him.
By the way, a long phone conversation with him is about seven minutes. That’s like a marathon to him. He’s not a teenage girl on the phone, let’s put it that way.
Bisnow: I imagine his contact list has gotten pretty long at this point.
Bisnow: You did say that bipartisanship has been a long-running theme, but it is also a mix of private citizens and public figures, and if not elected officials, then certainly government officials. Does that mix feel any different now, with increased scrutiny on conflicts of interest relative to 2016 and before?
Scaramucci: Yeah, well we went from a hostile environment in the Obama administration to a hostile environment in the Trump administration. I guess these jokers in Washington think it’s a good thing, but most people in America don’t like it. So there’s scrutiny, and conflicts of interest and I understand that, but if you’re a government official, you have to go through the Office of Governmental Ethics to get clearance to the event, and we can’t pay for the rooms.
But at the end of the day, putting people in the room from each side and seeing if we can generate some good ideas, or some good information — you know, the scope of registrants in years past and in registrants so far this year cover some of the richest families in the country, arguably the largest capital allocators, like the California pension fund.
So it’s a ripe environment, and if you’re Ben Carson trying to get capital flowing into opportunity zones and explain ... why it’s a good idea, then [SALT] is a great place to be. So it makes sense from all sides, and I haven’t had any sort of pushback regarding conflicts of interest at this point, but you’re 100% correct that it’s a way more hostile environment than it was two, three or four years ago. And two, three or four years ago, we thought it was a hostile environment then.
Anyone who had the experience that I’ve had, where I got ejected from Washington like an Austin Powers villain, getting burned — I can tell you that it’s not fun, and I can tell you that the American people don’t like it. If I stopped a person on the street and asked if they like the way they do things in Washington, how they try to annihilate and kill each other all day and night, they say, "No, I don’t like it."
And I didn’t like the way it happened under Obama, and by the way, had Secretary Clinton won the election, they would have annihilated her. They would have gone after her emails, her foundation … It would have been one faux-scandal after another.
Bisnow: Has the additional scrutiny surrounding potential conflicts of interest on where money’s flowing had any impact on what calls you’ve taken or interest you’ve received in the [OZ] fund?
Scaramucci: To this point, no. I’m not saying we won’t see it, but at this time I haven’t felt that. But your point is well-taken. We’re in a much more highly regulated, highly scrutinized environment. I can’t say [a conflict of interest issue] is not going to happen, but at this point, we haven’t felt that.
Bisnow: Something that comes to mind is Kushner Cos., even with Jared stepping away, Charles Kushner said he’s not going to take any more foreign investment because it’s not worth the headache. What’s your reaction to that?
Scaramucci: Well, I understand that, because with [Jared] being in office — but I’m not in office, I’m back as a private citizen, and I don’t have any government influence. I’m not lobbying for anything ... so I have no problem taking foreign money. It doesn’t bother me at all.
At the end of the day, it’s sort of nonsensical. We’re an international country and a globalized system, so capital should flow freely and agnostically, as long as it’s legal and conforms to the Patriot Act, and under those regulatory conditions, we shouldn’t have a problem taking money from anybody.
Bisnow: Your transition back to private life was something of, let’s say, an anomaly. So have any of your business relationships been affected? The level of publicity you experienced, to say nothing of the type of publicity, is not something that private equity folks tend to enjoy.
Scaramucci: I think I’m a different beast than most of the guys in our business. I’m a little bit like Mayhem from the Allstate commercials. I like taking on personal and professional risks. Joining the White House was a double-edged sword. It helped me in certain ways. After I left, in the beginning it wasn’t so great, but what’s been going on at the party since my departure has made me seem like a pin dot in comparison.
So one of the things [my time at the White House] has done has increased my profile and increased my access to people. It certainly helped us on the conference side, in attracting more speakers and more people, so I would say on the investment side, you have a double-edged sword with politics.
Some people could have left our [hedge funds] because they don’t like the president, or they don’t like me, or they don’t like me for supporting the president, but at the end of the day, [our funds] are at phenomenal three-, five-, 10-year performances. If they want to take their money out of the fund, I think it’s a mistake. I think people should be agnostic when it comes to investment. Some of my peer group would not want to be as political as me for those reasons.
The president had a nice line about it, where he said, ‘If 100 million people know you, and 50 million hate you and 50 million like you, that’s better than 100 million people not knowing you.’ So as long as you can take the heat, it’s OK. I think we’ve learned something in the last two years, my wife included, frankly. We’ve learned that neither of us have a glass jaw about things like getting "tabloided" in the New York Post.
You learn a lot about yourself through those things, like whether you can take a punch, and I can take a punch. At this point, I’m nonplussed about all of that, and I’m out here growing my business, talking about the economy. And I’ve learned a lot about how things operate from my time in Washington, so net, I think it was a positive.
My job is really to serve the customer, and if you look through our [federal compliance forms], I don’t have a trading account, all my money is in the fund. We’ve never had a lawsuit, knock on wood, and we run the business with an eye toward compliance. Compliance is very important to me. My dad was a blue-collar worker and he gave me my last name, so everyone that works for me has to make sure that they’re disciplined.
So if I have a high profile, but my performance is solid, people can [think what they want]. But by and large, my profile has led to people taking a close look at our performance over 14 years and say, "Wow, these guys have built great returns with low volatility." So overall, I’d say the increased attention has been a net positive.
Bisnow: Compliance is an interesting question when it comes to OZs, because regulations haven’t been finalized. Lots of the discussion in the past few months has surrounded what activity is safe, and what can be done now that will end up being legal. From your perspective and your fund’s perspective, how are you proceeding during this period?
Scaramucci: It’s a really good question, but by and large, most of the time when these regulations are in place, people are waiting for a few more clauses to be [clarified] before they point their capital. But the foundation [of the law] is there. And we’re using top-flight lawyers and accountants, whether it’s Shearman & Sterling, KPMG, etc.
We set it up in a private REIT structure, which makes it easy to track compliance and developmental demands for being zoning compliant, and we have our attorneys tracking everything to make sure it’s compliant. I’m very confident that we have that aspect right. And listen, as the [regulations] sort themselves out, we sort of have an indication for where they are, so as they’re finalized, I think we’ll be well-positioned.
Bisnow: What has been happening with the fund since you brought on Westport?
Scaramucci: We’re working with our traditional platform and with our known platform advisers, and we seeded Westport back in 2006 and have a great relationship with them. I’ve known [Westport founder] Russ Bernard for 25 years, and he’s got a fantastic 15-year record, and over 55% of his projects are developmental, which fits nicely with the OZs, and he’s got great relationships with institutions and large family funds. Why he would want to partner with us is that we’re pretty much experts on the platform distribution side.
Bisnow: So you mentioned planning on interviewing John Kelly on stage as a way to bury the hatchet. What are you planning on asking him, with all of those eyes on you both?
Scaramucci: Well, him and I have already buried the hatchet. We had a lovely, three-hour lunch and then I took him to dinner with a few of my clients. So I’m not going to make it like a celebrity conference. I’m not going to do that to him or myself. I’m probably going to pair him with Admiral [William] McRaven, because I think people really want to learn about ... those two, their experience in the White House Situation Room.
I think people would be blown away at the risks to the U.S., the terrorist risks, the issues that we deal with on a day-to-day basis, and I think there’s some declassified stuff they can talk about — whether the Bin Laden raid, or the raid last year on the terrorist cell that was making those laptop computer bombs. I’m not going to be up there doing a romantic dance with John Kelly, I’m going to be up there asking about relevant topics that people at the conference want to hear about.
My point was, I invited him, because for me, no grudges and no whining in politics, because I lost in the White House. And frankly, I always tell people that my mistake I made was a fireable offense. I should have never talked to that reporter, and trusted him, but I did, and it got me fired, and I own the mistake. So I don’t hold any grudge against Gen. Kelly for firing me.
Bisnow: Any other lessons you can say you’ve learned from your White House stint?
Scaramucci: I’ve told everybody this, and it applies to business as well: Keep your pride and your ego out of things. To a degree, it will always creep in, but do your best to keep your pride and your ego out of it, because when your pride and ego are involved, your emotions run high and your intelligence runs low.
In my experience, [then-Chief of Staff Reince] Preibus and [then-strategist Steve] Bannon blocked my entrance into the White House as [Office of Public Liaison] director, so I probably should have taken that message there and not locked and loaded on the two of them and started my first day in the White House with a chainsaw and a hockey mask. I probably shouldn’t have done that. So the lesson is, whether you’re an investor, managing your career or your family, or your domestic relationships, keep your pride and ego in check, and you’ll do way better.
Bisnow: Just one more thing: Since returning to the private sector, and now with the benefit of the time that has passed, do any moments stand out to you that made you feel as if people perceived or judged you differently than before your time at the White House?
Scaramucci: It’s a good question. Here’s one of the lessons I’ve learned: When you have a high profile, you have to go back to what your grandma said to you — what other people think of you is none of your business. So to me, I actually don’t think about it at all. So if some people perceive me differently because I worked with Trump or don’t like me because they don’t like Trump, no biggie to me. So I actually don’t know the answer to that. My guess is that we’re in a very polarized environment, so I’m sure there’s a group of people that feel strongly [about me].
But what I believe is that you should only judge someone once you meet them, not just from what you read about them, because things are distorted in our society now ... I don’t judge anybody until I meet them myself, not based on what I see on TV, or what I see journalists say about them in a newspaper or a magazine.