Activist investor Carl Icahn agreed to allocate as much as $3 billion to a management duo composed of his son, Brett, and David Schechter, expanding their role in running the 76-year-old's investments.
Under a legal agreement filed with federal regulators last month, Brett Icahn and Mr. Schechter will get to invest the capital in companies with stock market values between $750 million and $10 billion.
Brett Icahn and Mr. Schechter have been running $300 million for Carl Icahn, who owns more than 90% of Icahn Enterprises LP, a holding company with $24 billion in assets, including activist investing partnerships as well as the Tropicana casinos, an oil refiner and an auto-parts maker. The arrangement expires after Carl Icahn turns 80 in 2016, giving Brett the chance to both prove his mettle as a successor and develop a track record to start his own hedge fund.
The $300 million Brett Icahn and Mr. Schechter have been investing since April 2010 generated a gross cumulative gain of 96% by the end of June, according to a July 27 filing with the Securities and Exchange Commission.
“These two guys doubled our money over the last two years,” Carl Icahn said in an interview. “You can't complain about that.”
Brett Icahn didn't return an e-mail seeking comment.