The US Commerce Department is set to bring in Michael Grimes, a former Morgan Stanley banker, to oversee the development of a proposed sovereign wealth fund—a key initiative under President Donald Trump aimed at strengthening national security investments.
Grimes, who left Morgan Stanley after 30 years, will take on a leadership role in shaping the fund, according to sources familiar with the matter. The idea of creating a sovereign wealth fund was part of Trump’s 2024 campaign platform and was formally introduced through an executive order signed in February.
While still in the early stages, the proposed fund is expected to focus on public-private investment partnerships to direct capital into sectors critical to US national security, including:
- Critical minerals and rare earths
- Manufacturing and industrial development
- Defense technology and supply chain security
- Medical research and advanced technology
One potential structure under consideration would see the fund working in coordination with existing government-backed financial institutions such as the US International Development Finance Corporation (DFC) and the Export-Import Bank. This approach could facilitate American investment in strategic sectors, particularly those where China currently holds a dominant market share.
In a related move, the US Treasury Department recently appointed JR Gibbens, a Wall Street and military veteran, to advise on the fund’s development.
Unlike countries such as Norway, Saudi Arabia, and China, which have long used sovereign wealth funds to manage national reserves, the US has never established such a fund before. Typically, sovereign wealth funds are backed by revenues from natural resources, trade surpluses, or privatization proceeds. The details of how the US fund would be financed remain unclear, though early discussions have ruled out using tariff revenues as an initial funding source.
