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Sep 10, 2012

Icahn in the making

Carl's son Brett is lower-key than his father – but still favors the activist approach

Mediocre management teams have a new Icahn to worry about. The veteran activist Carl Icahn – who has taken on boards at numerous companies over the years, from Yahoo! to Motorola and Time Warner – has handed $3 bn to his son Brett and investment manager David Schechter to give them a chance to prove their worth.

At the age of 33, Brett has plenty of years ahead of him in the investment game. So what do we know about him and his investment style?

The Bloomberg journalist who broke the story, Miles Weiss, says he is lower-key than his father – but still favors the activist approach.

‘He maybe works with people a little bit more [and is] a little bit less confrontational than Carl is, but at the same time he understands the activist strategy very well and… has done really well with it,’ Weiss comments in a Bloomberg video.

Brett displayed his activist leanings in a phone interview with the New York Times last year, when the paper put together a profile of his father. ‘Corporate democracy is a myth, and cronyism on boards is rampant,’ he told the newspaper. ‘That’s why there’s a lot of opportunity as an activist.’

The younger Icahn wasn’t always on course to follow in his father’s footsteps, however. After graduating from Princeton and interning at Goldman Sachs, he had a go at movie-making and directed a couple of art films.

Then a decade ago his father hired him as an investment analyst, and he hasn’t looked back.

Brett and Schechter already have a decent collective track record. Icahn senior gave them $300 mn to manage two years ago, and by this June they’d doubled their money.

Brett also sits on the boards of a number of companies part-owned by his father, including news and data service WebMD Health, video-game firm Take-Two Interactive and automotive supplier Federal-Mogul.

According to a regulatory filing, Brett and Schechter will invest their new funds in companies with market caps between $750 mn and $10 bn.

With $3 bn under their belts, the duo have an opportunity to step out from Carl Icahn’s shadow and leave their own mark on the market.