News About Banking Industry

Carl Icahn reports 10.3% investment loss

Carl Icahn, who briefly toyed with an offer to be Donald Trump’s Treasury secretary, posted a 10.3% loss in his investment portfolio for the quarter ended in September amid declines in stocks like Chesapeake Energy, where Icahn is the largest shareholder. Icahn’s 10.3% quarterly decline has resulted in a loss of 2.8% of the year, executives from his firm, Icahn Enterprises, said Thursday.

It has been a rough year for professional investors, including hedge funds, which have struggled with wild swings in stocks, commodities, currencies and even bonds. The trouble started in August amid fears that a slowdown in China could spread to the rest of the world.  Hedge fund manager Bill Ackman said his Pershing Square Holdings is down 18% for the year following a 7% decline in October.

Ackman’s portfolio was hit by a devastating blows to pharmaceutical company Valeant, in which he owns a roughly 6% stake. The pain continued Thursday with the drug company’s stock dropping another 17% on news of a Congressional investigation into allegations of price gouging. Valeant stock is down 45% this year to $79 a share, which is expected to drag down a number of hedge funds that followed Ackman into this investment.

The average global hedge fund is still down 1.3% this year so far, according to data from Hedge Fund Research. Icahn Enterprises CEO Keith Cozza attributed the quarterly loss to declines stocks with exposure to commodities, suggesting losses in energy holdings. Third-quarter “performance was negatively impacted by losses from some of our long equity positions with significant exposure to the commodity sector,” Cozza told investors.

Shares of Chesapeake Energy, where Icahn holds a 10% stake, are down 60% this year. Icahn is slated to meet with the CEO of insurance giant AIG Thursday to discuss his proposal that the company be broken up into three parts.