Front Running
the Government

For most of the modern era, the federal government supported strategic industries the way it always had: grants, loans, tax credits, the occasional tariff. It did not take ownership. That line has now been crossed, deliberately and repeatedly. Since January 2025 the government has committed roughly $20.9 billion across sixteen separate deals that involve direct equity ownership of American companies. In our view, that is the early architecture of an American sovereign wealth fund, assembled one strategic company at a time.

The logic runs through three problems that have no clean fix on their own. Deficits are structural and large. The country is in an open industrial contest with China across the materials and technologies that decide the next several decades. And a long stretch of offshoring has left critical supply chains, rare-earth magnets, semiconductors, the metals inside every weapon and data center, dependent on a strategic rival. Direct ownership addresses all three at once: it pulls national-security supply chains onto domestic soil, and it lets the public balance sheet share in the upside of the companies it backs.

It is also durable rather than partisan, which is what makes it a multi-year theme rather than a passing headline. The case for the public sharing in the companies it underwrites has supporters at both ends of the political spectrum, which means a change in administration is unlikely to switch it off entirely. For an investor, the practical question is simple: if the government is going to keep buying, what does it buy next?

Reading across the deals already done, a pattern emerges, and it is the pattern we use to anticipate the next ones. The companies the government has chosen tend to share four traits: they sit at a chokepoint China controls, they produce a material the military cannot do without, they are advancing a real domestic project rather than a concept, and they are frequently already receiving some form of federal funding before the equity stake arrives.

That screen points away from the names everyone already owns. The megacap AI complex and the marquee defense primes are crowded and expensive, and they do not need Washington's balance sheet. The opportunities sit further down, in the unglamorous corners of the supply chain where a domestic producer is one government check away from being bankable. We sort our watchlist into two tiers, by how much federal backing is already in place.

This tier is the proof the whole idea rests on. These are companies where Washington has already moved from supporter to shareholder. When it backed U.S. Steel, it took a golden share carrying the power to veto major corporate decisions. In MP Materials, the only fully integrated US rare-earth and magnet producer, the Defense Department became the largest shareholder, paired with a guaranteed price floor and a commitment to buy the company's entire magnet output for a decade. The structures are getting more creative as the program matures, warrants in Vulcan Elements and ReElement, profit participation in the Westinghouse reactor deal, equity in the project as well as the parent at Thacker Pass. The plumbing is being built for far more of this.

These are the names the screen points at hardest. Each sits at a genuine national-security chokepoint, each is advancing a real project, and each gives the government an obvious reason to step in, sole-source enrichment, the only public shipbuilder, the alloys that go into next-generation defense and aerospace. We treat this tier as the most likely source of the next announcement.

The sharpest point here is not which names to buy, it is when and at what price. This kind of government-backed buying tends to arrive into weakness rather than into a melt-up, and this administration has shown it will treat market drawdowns as a feature rather than a bug. We expect the program to ramp after the midterms and into the back half of next year. So the tiers above are a watchlist for a pullback, not a buy-it-all-today instruction. Within each name, the entry matters as much as the name.

Three honest caveats. First, the small-cap minerals names, USAR, NB, UAMY, IPX, TMQ, move in triple-digit percentages on announcements and give much of it back; position sizing is the whole game there. Second, "government as shareholder" is itself a governance risk, these are not clean fundamentals stories, and Washington's interests will not always line up with a minority holder's. Third, several Tier 1 names have already had their government-stake repricing, so the easy money on the announcement is gone; from here the thesis is execution plus the broader multi-year buying program, not the initial pop.

The honest framing is that the direction is clearer than the timing. The government is becoming a strategic buyer, the deals are real and widening, and the tiers above are a reasonable map of where the money goes next. What it is not is a green light to buy any of it at any price today. Sizing, entry, and how it fits the rest of a plan is where the actual work lives, and it is the conversation we are here for.