I know Carl Icahn cares about his investors, but the main reason he’s giving back their money is because he doesn’t want to have to register his fund with the Securities and Exchange Commission.
Tuesday, in a letter to his investors, Icahn said he would be returning their capital, which represents $1.76 billion of the $7 billion he manages.
On July 11 of this year, any hedge fund over $150 million in assets will have to register with the SEC. Once registered, those funds will be forced to provide a great deal of transparency to the SEC, including their leverage and trading strategies.
Principals will also be restricted in their personal trading and all such funds will be required to save emails and be subject the inspection by the SEC. The funds, essentially, become an open book.
A hedge fund that is managing the personal assets of the manager, however, will not be required to register with the SEC. Is it any wonder the Icahn, like Stanley Druckenmiller before him, is making his firm a family office?
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