Domestic bombshell makes public disclosure and looming $200 million sale even more contentious — especially with no asset protection program in sight.
A week after shouldering his way into the Trump administration, Anthony Scaramucci’s wealth is a matter of public knowledge and his wife wants a divorce.
That’s a complicated combination. The lawyers can see everything we can, limiting his wiggle room when it comes to a settlement.
And unless there’s a lot going on in his finances that the papers don’t reveal, he didn’t have much wiggle room to begin with.
Respect where it’s due
Scaramucci hit the roof a few days ago when his public financial disclosure went public, but he gets props for filing the forms in the first place.
He also did the right thing by negotiating the sale of his hedge fund firm SkyBridge Capital when it initially looked like he’d be heading to the White House and would want to minimize intrinsic conflicts of interest.
That’s how government service is supposed to work.
Unfortunately, Deidre Ball Scaramucci filed her own papers to end the marriage at a really bad time. While hedge fund hubby may have committed to jumping through the SkyBridge door, his golden parachute hasn’t opened yet.
He’s not doing badly — plenty of Long Island property, a lot of “fun” ventures, at least $1.7 million in life insurance — but weighing every account against the mortgages maybe adds up to $25 million.
The vast majority of his wealth is still locked up in the firm waiting for the deal to close. And as every strategically minded advisor knows, money management businesses like SkyBridge are only worth what a motivated buyer is willing to pay.
Hedge fund valuations can be especially arcane. Until Scaramucci negotiated his exit, he could have given the government and his wife’s lawyers just about any reasonable number and the expert witnesses wouldn’t have blinked.
But with numbers in the public record, it’s going to be tougher for his team to walk the estimates back to argue for a better asset split.
Deidre has a rough idea what SkyBridge and the other ventures are worth now. While she may not rate a 50/50 settlement — she’s only been with him since 2014 — every negotiating point at this scale adds up to real money.
That ticking legal meter may be in the background of his rage when the disclosures were “leaked.” Either way, the transparency is going to cost him.
Where’s the plan?
Granted, the lawyers may have gotten Deidre to sign a prenuptial contract locking her out of all the equity he built up before they got together. There’s no line on the federal form for your asset protection or estate plan.
But there’s room for trusts and other structures that shield wealth from creditors and long-term tax bills. Scaramucci doesn’t list any.
That’s the real eyebrow-raiser here. Unlike masters of the universe who hold the crown jewels at arm’s length — in trust for the kids, in a retirement account like Mitt Romney, in a maze of corporate shells — Scaramucci apparently owns his SkyBridge stake outright.
And although big numbers are good when you want to brag, he was probably better off leaving his wealth on the nebulous LLC balance sheet where the accountants had a lot more leeway.
At 1.5% of client assets, SkyBridge should have been spinning out a healthy $170 million in annual revenue, enough to pay the boss a $5 million salary plus another $5 million for his share of the profit.
From reports around the deal price, that’s a cozy internal annuity of 11% a year, which isn’t bad at all for a fund-of-funds guy.
Selling out translates sweat equity into a hard number for creditors to grab at, generating a taxable event in the process.
Granted, Scaramucci isn’t quite the “hedge fund billionaire” he sometimes becomes in the society columns, but he still should’ve had advisors walk him through this.
It’s too late now. If the deal closes on schedule, he’ll be cashing a $90 million check in the next few weeks. Maybe Deidre gets a piece of that money.
The IRS will definitely want a big cut as well — but federal rules around divestiture may soften that bite considerably, provided the cash goes into a true blind trust where it should’ve been all along.
Of course the SkyBridge sale is still contingent on Treasury approval. I doubt that there’s any real national security threat in an $11 billion hedge fund complex shifting to Chinese ownership, but even in the unlikely scenario the deal falls through, it still sets a price on what Scaramucci’s slice of the firm is worth.
Whether he ends up paying Deidre her share of that slice in cash or carried interest, her people now know what it’s worth on the open market and what they can demand. It’s not a win for him either way.
Barring a lot more attention to prenuptial planning than what the disclosures say about the Scaramucci estate plan, I suspect Deidre can ask for a surprising amount.
She worked at SkyBridge for years before he left his first wife and she shifted from employee to legal partner if not full equality in the firm. As vice president of investor relations — key to maintaining AUM — she arguably had a more overt stake than normal in Scaramucci’s long-term success.
Complicating their professional relationship probably didn’t do much to keep separate property from commingling. But as we’ve learned, Scaramucci isn’t exactly fixated on the cold math or maximizing the bottom-line details.
He’s a different kind of animal. We’ll see how his talents respond to the global spotlight.
