Bloomberg News

Icahn’s Denner Said to Consider Leaving to Start Own Hedge Fund

September 15, 2011

Sept. 15 (Bloomberg) -- Billionaire Carl Icahn’s top health-care investing deputy, Alex Denner, may leave to start his own hedge fund, said two people with knowledge of the plan.

Denner, 42, senior managing director at Icahn Enterprises LP, would open his firm by the end of the year, and Icahn, 75, may invest in it, said one of the people, who asked not to be identified because the information is private.

Since joining the activist Icahn’s New York-based firm in 2006, Denner has helped shuffle management teams, push for sales or drive restructurings of at least six drug companies. He was part of Icahn’s health-care investing team as the hedge fund took stakes in Genzyme Corp. before its $20.1 billion sale to Sanofi and MedImmune Inc. prior to its $15.2 billion acquisition by AstraZeneca Plc.

Icahn wasn’t available to comment, according to his assistant, who asked not to be named.

Icahn, who buys positions in companies he considers to be underperforming and then pushes for change, said in March he no longer wanted to oversee cash for clients because of concerns about the economy and unrest in the Middle East, according to a letter filed with the U.S. Securities and Exchange Commission. Investors had already withdrawn much of their capital from Icahn’s funds, leaving $1.76 billion of fee-paying assets in the $7 billion group.

Denner would be at least the second Icahn Enterprises executive to depart since August 2010. Keith Meister, who was vice chairman and principal executive officer, left in August 2010 to start his own hedge fund, Corvex Management LP in New York.

Profit Agreement

On June 10, Icahn signed an agreement with Denner promising him part of the profit generated by the hedge funds’ investment in Forest Laboratories Inc., a New York-based drug company. Under the agreement, Denner’s profit interest would equal 5 percent of overall gains after the funds receive an 8 percent return, compounded annually, according to a June 17 regulatory filing. Prior to the agreement, Denner was entitled to less than 2 percent of the profit generated by Icahn’s investment in the drugmaker.

Denner is chairman of Enzon Pharmaceuticals Inc., in Piscataway, New Jersey, and a director of Weston, Massachusetts- based Biogen Idec Inc. and San Diego-based Amylin Pharmaceuticals Inc.

He gained his board seat at Biogen, the world’s biggest maker of multiple-sclerosis medicines, in 2009, one of two Icahn won in a proxy battle that year. He’s since helped install a third Icahn-associated director, oversee the appointment of Chief Executive Officer George Scangos and narrow the company’s research focus in a restructuring that cut 650 jobs.

Forest Laboratories

Denner served on the board of New York-based ImClone Systems Inc. from 2006 until its 2008 sale to Indianapolis drugmaker Eli Lilly & Co. for $6.5 billion.

Icahn’s health-care enterprises haven’t always found success. The investor expressed interest in buying Biogen in 2007 for $23 billion and, after the company put itself up for sale in October of that year, withdrew his bid. He waged a proxy fight in 2008 before gaining representation the next year.

An Icahn team led by Denner failed in August to gain representation on the board of Forest Laboratories after the company proposed three new directors of its own. Denner said at the time he believed Forest “made some positive governance changes because of our involvement.”

Before joining Icahn, Denner was a portfolio manager at Morgan Stanley and hedge fund Viking Global Investors LP in New York. He holds an undergraduate degree from the Massachusetts Institute of Technology in Cambridge and a Ph.D. from Yale University in New Haven, Connecticut.

--Editor: Josh Friedman, Reg Gale.

To contact the reporters on this story: Saijel Kishan in New York at skishan@bloomberg.net; Meg Tirrell in New York at mtirrell@bloomberg.net

To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net; Reg Gale at rgale5@bloomberg.net


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