Icahn Enterprises L.P. (IEP) unveiled significant management changes and financial updates in a recent statement from Chairman Carl C. Icahn. Icahn outlined the firm’s investment strategy, emphasizing the effectiveness of activism in generating long-term returns. He highlighted the company’s expansion beyond real estate activities to embrace activism fully since 2000.
Regarding the recent performance, Icahn noted that IEP’s depositary units had surged by approximately 1,066% since January 1, 2000. Comparatively, major indices such as the S&P 500, Dow Jones Industrial and Russell 2000 had seen increases of about 436%, 491% and 453%, respectively, over the same period.
Icahn emphasized the value of activism in addressing poorly-run public companies, stressing IEP’s unique position in pursuing activism due to its track record and stable capital base.
Icahn also announced the following management changes:
- Andrew Teno, previously a portfolio manager at Icahn Capital, has been appointed as CEO of IEP.
- David Willetts will serve as CEO of Pep Boys.
“Andrew has had an impressive record of stock picking and position stewardship within our investment segment. I am confident in his ability to help lead IEP into the next phase of its evolution,” Icahn said. “David Willetts has done an admirable job in improving the operational performance of our portfolio companies. We believe David’s skill set is particularly suited to work on a day-to-day basis to drive the significant value creation potential in Pep Boys.”
Icahn continued: “Over the long term, our activist returns have been outstanding. Given our hedge portfolio and the frequent long time horizon of our complex activist investments, our returns can often be lumpy. There are also times when our hedge book can go against us and overwhelm the performance of our long positions. This underperformance has occurred several times in IEP’s history. While there are never guarantees, we expect our returns to improve back to historical levels where our long positions far outperform our hedges. If successful, this should result in greatly enhanced net asset value.”
Icahn also released a financial update for IEP, which reported an estimated indicative net asset value of $4.76 billion as of December 31, 2023, representing a decrease of approximately $411 million. The firm said it intends to declare a $1.00 per depositary unit distribution for Q4 2023, with unit holders having the option to receive cash or additional depositary units.
IEP’s cash position stands at $2.7 billion, comprising various segments’ cash and cash equivalents.
