WEST PALM BEACH, FL (www.hedgeco.net) – Financier Carl Icahn has fallen short of his projected $3 billion target for his new hedge fund, Icahn Partners LP. According to the filings with the USSecurities and Exchange Commission {SEC}, Icahn Partners has so far raised $1.6 billion, a respectable seed capital by any measures. Icahn had projected to raise a total of $3 billion for the newhedge fund.
Details provided in the SEC filing shows that US investors committed about $400 million to the new fund, while about $900 million came from European investors. Carl Icahn devoted $300 million of his personal fortunes to the fund as well. Icahn became well known for his aggressive corporate acquisition techniques when he took over TWA in 1985, and has earned a reputation as an activist shareholder from his other corporate activities.
According to Forbes Magazine, Carl Icahn�s fortunes are worth about $7.6 billion; his new fund may levy higher fees and longer investment horizon according to published reports. Alex Bentley, a co-founder of the Boston based Coronado Investments LLC said, “When someone starts a fund, they often have these ambitious goals, sometimes you don’t hit those goals so you have to go back to the drawing board and be a little more realistic,” according to him. Officials of the Icahn Partners fund were not immediately available for comment. Icahn Partners charges 2.5 percent for management fee, and 25 percent for incentive fees. The industry standard for such fees is about 1.5 percent and about 20 percent for management fee and incentive fee respectively.
But many think the seed capital put together by Icahn is great by any stretch of imagination, and once trading commences, asset build up for the fund will almost certainly accelerate. That number far exceeds the average seed capital raised by most new hedge funds, according to Victor Zimmermann, an attorney who works with hedge funds at the New York law firm Curtis, Mallet-Prevost, Colt & Mosle LLP. Most new funds start out with about $100 million or less in seed capital.
The minimum investment requirement for Icahn Partners fund is $25 million, but according to published reports, that minimum may has been relaxed in some states. Icahn Partners Fund requires a minimum commitment of three years before withdrawals could be made from the fund. Industry standard for such provision stands at about 1 year.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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