News Column

Carl Icahn's son Brett Icahn and a business partner said to be starting a hedge fund management firm in Miami

May 9, 2014

By Ina Paiva Cordle, The Miami Herald

May 09--Another Icahn reportedly is heading to Miami.

Financial mogul Carl Icahn's son Brett Icahn and his business partner David Schechter are planning to set up a hedge fund management company in Miami, according to a report Friday in the Wall Street Journal, citing "people close to the situation."

If so, the move would be the latest sign of Miami's growing allure as a financial capital. Other hedge funds have opened shop in recent months, as civic leaders spread the word about South Florida's tax-friendly policies and increasing gentrification, including a burgeoning arts and cultural scene, luxury retail offerings and hot real estate market.

The as yet unnamed company would be 65 percent owned by Brett Icahn and Schechter, and 35 percent by Carl Icahn'sNew York-based Icahn Enterprises, which is expected to give $1 billion in capital for the new firm to manage, the Wall Street Journal article said. The new firm is also expected to manage other money for outside investors.

Calls to Brett Icahn to confirm the report and provide additional details were not returned.

Brett Icahn, 34, and Schechter, 38, already manage a $4.8 billion portfolio of stocks for Icahn Enterprises that has garnered annualized returns of 37 percent since its inception in April 2010, according to the company. In various media reports, Carl Icahn, 78, who has a home on Indian Creek island, has credited his son and Schechter for his 2012 investment in Netflix, which has resulted in a $1.6 billion profit for Icahn's company.

According to the Wall Street Journal article, the new management company is expected to follow a shareholder-activism strategy for its investments. Activist investors tend to take a stronger role, advocating such moves as strategy shifts and management changes.

Although Miami'sDowntown Development Authority did not meet directly with the owners of the new hedge fund management company, the agency has marketed Miami to other financial firms, said Nitin Motwani, managing principal of Miami Worldcenter and a DDA board member. Among the hedge funds that have set up shop in Miami since the DDA started its campaign in May 2013 is Universa Investments, which moved from Santa Monica, Calif., in March.

Said Motwani of the new Icahn venture: "It's just another example that people are realizing that Miami is not only a great place to live and a great place to play, but a great place to work."


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Source: Miami Herald (FL)

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