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In the weeks earlier than the US assault on Iran, a monetary advisor to US Defense Secretary Pete Hegseth apparently tried to speculate a big sum in an arms fund. This is reported by the Financial Times, citing a number of individuals accustomed to the matter.

In February, Hegseth’s dealer on the US funding financial institution Morgan Stanley contacted BlackRock to barter the acquisition of shares in its “Defense Industrials Active ETF”. It was an funding price a number of million {dollars}. The negotiations occurred shortly earlier than the USA launched its navy assaults in opposition to Iran.

BlackRock’s prospectus touts the $3.2 billion fairness fund as an opportunity to profit from elevated authorities spending on protection and safety amid geopolitical fragmentation and financial competitors. According to the FT, the biggest positions embrace protection firms resembling RTX, Lockheed Martin and Northrop Grumman, which depend the US Department of Defense amongst their largest prospects.

Ultimately, the deal failed as a result of the fund, which was launched in May 2025, was not but obtainable for Morgan Stanley prospects to buy. According to the FT, it’s not recognized whether or not Hegseth’s dealer subsequently discovered another defense-focused fund to make the funding.

The US Department of Defense vehemently denies the allegations. Pentagon chief spokesman Sean Parnell wrote on Platform X: “This claim is completely false and fabricated. Neither Secretary Hegseth nor any of his representatives have approached Blackrock about such an investment.” BlackRock and Morgan Stanley declined to remark to the FT.