Carl Icahn, the billionaire investor who has helped usher in a new golden age of activist investing in the U.S. stock market, was stung last year by the plunge in the price of crude oil. His investment fund posted a loss of 7.4% in 2014, its first down year since the 2008 financial crisis.
Icahn’s publicly-traded investment vehicle, Icahn Enterprises, on Friday reported an adjusted net loss of $221 million in 2014, compared to the company’s $1 billion of net profit in 2013. The bulk of those losses occurred in the fourth quarter, when the company posted losses of $478 million. It was also the first time Icahn Enterprises posted a loss since the 2008 financial crisis.
“This year’s results were obviously disappointing, with the precipitous decline in oil prices impacting the profitability of many of our segments,” Icahn said in a statement.
Icahn’s investment fund was stuffed with energy companies that got hit hard by the sharp drop in the price of oil in the fall. He held big stakes in
For Icahn, things could have been much worse if not for Apple. Shares of Apple, which is Icahn’s biggest single trading position by far in his investment fund, soared in 2014.
“The performance of our investment in Apple, the largest position in our investment segment, softened the impact of the decline in oil prices and hopefully will continue to do so (I look forward to wearing the watch in the very near future and possibly driving the car in the more distant future),” Icahn said in a statement.
An Icahn Enterprises executive disclosed on the company's conference call on Friday that Icahn's investment fund posted a 7.4% loss in 2014, ending its long winning streak. In recent years, Icahn has significantly outperformed the vast majority of hedge fund managers as his brand of activist investing has become more popular and profitable. Icahn Enterprises, which used to trade at a big discount to its net asset value, has become popular with investors and its stock price has doubled since 2012. But the oil crash has been reflected in the the shares of Icahn Enterprises, which have weakened by about 10% in the last year.
While Icahn has become more closely associated with Apple and his role with Herbalife in recent years, oil and energy have been a big part of his investment portfolio for a very long time. In addition to his other energy positions, he has been a big beneficiary of the fracking boom because of his various railcar holdings, which have benefited from their increasing role moving oil across the U.S.
Icahn signaled on Friday that oil will continue to be a big part of his investment strategy. “I believe a great amount of profit in the next few years will be made by those who hold positions in energy companies,” said Icahn. “However, I also believe that oil prices will continue to decline in the near term.”
