Carl Icahn is keeping his family close.
Mr. Icahn's son, Brett Icahn, has scuttled plans to strike out
on his own with a new hedge-fund firm, people familiar with the
matter said.
The younger Mr. Icahn will instead stay at his father's public
company, Icahn Enterprises LP, where he co-manages a portfolio of
more than $6 billion of stocks with his longtime colleague, David
Schechter, the people said.
Thanks to investment returns on some of Mr. Icahn's
best-performing positions, the duo now manage $1 billion more than
they did a year ago.
The Wall Street Journal first reported in May that Brett Icahn
and Mr. Schechter were set to start their own Miami-based
hedge-fund firm to specialize in shareholder activism, similar to
the elder Mr. Icahn.
Icahn Enterprises was in negotiations to fund the new enterprise
with $1 billion in startup cash in exchange for a partial ownership
stake in the firm.
Before the deal was complete, however, talks fell apart.
Carl Icahn, 78 years old, hasn't laid out succession plans
publicly and has no interest in stepping away from the firm he
founded, according to people familiar with the matter. Icahn
Enterprises manages both Mr. Icahn's vast fortune and runs several
companies he has acquired.
The elder Mr. Icahn has credited Brett Icahn, 35, and Mr.
Schechter, 39, with his 2012 investment in Netflix Inc., a pick
that has netted Icahn Enterprises a profit of about $2 billion so
far. Mr. Icahn has sold a significant part of the Netflix stake
over the past year.
The duo also suggested to Mr. Icahn an investment in Apple Inc.,
which he made last summer.
Brett Icahn and Mr. Schechter both have spent more than a decade
working at Icahn Enterprises and are responsible for what is known
as the Sargon Portfolio.
Long one of the more outspoken voices in the hedge-fund
industry, Mr. Icahn's company returned money managed for outside
investors in 2011. He remains a forceful public presence through
his firm's activist positions in companies like Hertz Global
Holdings Inc. Earlier this week, Hertz announced its chairman and
chief executive had resigned, weeks after Mr. Icahn criticized
management. On Thursday, Hertz said it agreed to add three Icahn
representatives to its board.
Icahn Enterprises managed more than $31 billion as of midyear,
including roughly $11 billion in its investment division.
Write to Rob Copeland at rob.copeland@wsj.com and David Benoit
at david.benoit@wsj.com
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