Chinese Firm Scraps Deal to Buy Scaramucci’s Hedge Fund

Anthony Scaramucci, the Wall Street investor whose short tenure as President Donald Trump’s White House communications director elevated him to national prominence, is not going to sell his hedge fund company to a Chinese conglomerate after all, the two companies announced Monday.

The conglomerate, HNA Group, is closely tied to the Chinese government. In a joint statement, HNA and Scaramucci’s firm, SkyBridge Capital, said the two sides had agreed not to pursue the deal, but would still work together to try to sell SkyBridge’s offerings to Chinese investors.

Scaramucci didn’t respond to requests for comment. In a recent interview, he said he was excited to be back working at his hedge fund company, and Monday’s statement said he would be serving as the firm’s co-managing partner.

HNA, which is on shaky financial footing after an international acquisition spree, agreed in January 2017 to buy Scaramucci’s stake in SkyBridge. Scaramucci founded the company to place investors’ money into a selection of hedge funds.

When he struck the deal with HNA, Scaramucci was expecting to become a liaison between the White House and the U.S. business community. But the HNA deal helped derail that White House gig because of concerns that his ties to the Chinese company would create a conflict of interest.

Scaramucci ended up working for the White House in another capacity. He spent 10 days in July as the communications director, stepping down after delivering an expletive-laden tirade against Trump’s chief of staff at the time, Reince Priebus.

HNA’s quest to buy SkyBridge seems to have met a fate similar to Scaramucci’s first White House appointment. The Committee on Foreign Investment in the United States, a federal body that reviews proposals by foreign-owned entities to buy American companies, had yet to approve HNA’s purchase.

Monday’s statement said that the committee had offered the two sides “a path to approval” if they made certain changes, but that neither side believed it was in its best interest to continue pursuing the deal.

The committee, known as CFIUS, has sunk a number of other recent deals in which Chinese companies sought to buy American firms. Among them, a bid by China’s Ant Financial to take over MoneyGram, a Dallas fund transfer company, collapsed after the panel wouldn’t sign off. In the technology industry, CFIUS opposed the planned acquisition of chipmaker Lattice by Canyon Bridge Capital, which had taken money from Chinese firms.

This year, the chipmaker Broadcom, a Singaporean company, ended its bid to take over an American rival, Qualcomm, after the committee said the deal could give Chinese companies an advantage.

The scrutiny by CFIUS has intensified as the Trump administration seeks to curb what it says are unfair Chinese trade practices. The administration has described those practices as posing a threat to U.S. national security.

SkyBridge’s chief investment officer, Ray Nolte, said it hoped to have a “productive” relationship with HNA in the future.

Guang Yang, HNA’s president in North America, said HNA had “tremendous respect” for SkyBridge.