One of Carl Icahn's top lieutenants has decided not to launch a hedge fund after all
- A star investor who was backed by Icahn Enterprises has decided not to launch a hedge fund after all.
- David Schecther's Serafima Investments told clients this week it won't accept outside capital.
- "David Schecthter has elected to manage his own capital to maximize his investment flexibility," an email notifying investors said.
David Schechter, a former star investor at Icahn Enterprises, was supposed to launch a hedge fund in the coming months with the backing of his former boss. But plans to launch the fund to outside investors have since been scrapped, people familiar with the situation said.
Earlier this week, a representative for Schechter's fund Serafima Investments sent an email to potential clients announcing that Schechter plans to form a family office instead, meaning he won't accept outside capital, according to several people familiar with the matter.
"David Schecthter has elected to manage his own capital to maximize his investment flexibility," the email said.
Serafima Investments had staffed up with team including analysts, an administrative officer and head of business development, a LinkedIn search shows.
Billionaire Carl Icahn's Icahn Enterprises was expected to back the new venture. It's not clear where that funding lies.
Schechter didn't immediately respond to emails seeking comment, and calls to his listed phone number did not go through. An email and a call to Schechter's business development head were not immediately returned. Icahn didn't immediately respond to a request for comment.
The change was swift for investors who had considered an investment in the budding firm. Records with the Securities and Exchange Commission show that Serafima terminated its registration on February 26.
Schechter drew attention at Icahn Enterprises when he co-managed a $4.8 billion portfolio that produced double-digit returns with Icahn's son, Brett, the Wall Street Journal reported in 2014. They managed that portfolio, called Sargon, through 2016, and became consultants to Icahn Enterprises.
Forbes estimated that Schechter earned $280 million in 2016 for his role managing Sargon.