Billionaire hedge fund manager Carl Icahn plans to return all of the fee-paying capital in his hedge funds, which represents $1.76 billion of the $7 billion in total assets he manages, citing, in part, the possibility of another big drop in the stock market in the future.
“While we are not forecasting renewed market dislocation, this possibility cannot be dismissed,” Mr. Icahn wrote in a letter to investors that was released in a regulatory filing Tuesday morning. “Given the rapid market run-up over the past two years and our ongoing concerns about economic outlook, and recent political tensions in the Middle East, I do not wish to be responsible to limited partners through another possible market crisis.”
Mr. Icahn is the latest in a string of prominent managers who no longer want to manage money for outsiders. Hedge fund icon Stanley Druckenmiller of Duquesne Capital Management LLC, and Chris Shumway, who founded Shumway Capital Partners, are among those who have handed money back to clients in recent months.
Since its launch in fiscal 2004, Icahn Capital has delivered gross returns of about 106.9%, Mr. Icahn said in the letter. Icahn’s hedge funds were up about 15% gross in 2010 and 33.3% gross in 2009, according to his filing. In the first two months of 2011, the fund returned 8.7%.