All Hedge Funds Need Is Better PR, Says Guy Who's Evidently Never Heard Of Carl Icahn - Dealbreaker

All Hedge Funds Need Is Better PR, Says Guy Who's Evidently Never Heard Of Carl Icahn

Public opinion is fool's errand.
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Those in the hedge fund community have long suffered the slings and arrows of working in a profession that politicians left and right reflexively scapegoat when they can't think of anything more clever or enlightening to say. That's just part of the tradeoff: If you're given a mid-six-figure entry-level salary, you ought to be able to take the sour look from your cousin with the Bernie 2016 hoodie.

StatlerAndIcahn

But for Marathon Asset Management's Andrew Rabinowitz, this is an intolerable situation. And he's got some ideas to help hedge funders with their public perception: "Hedge funds should hire the same PR firm that private equity firms did because private equity has completely nailed it on the PR perspective," Rabinowitz told a conference audience. He went on to lament the dearth of reporting on hedge funders' philanthropic exploits:

"I started an endowment and we donate to children's hospitals," Rabinowitz said. "Three weeks ago ... we won a presidential citation for one of the programs we did for the children’s hospital. You know how much press covered that? Zero."

"Now, if I left Marathon or got fired from Marathon, you know how many people would cover that?" Rabinowitz asked the crowd. "Probably more than zero."

Leaving aside the obvious contradiction here – a guy who demands voluminous praise for his altruism complaining publicly about his industry's reputation – there is a valuable question here: should hedge funds invest more in their PR? Ought they try to achieve sterling public reputation enjoyed by the private equity industry, whose trade lobby recently renamed itself the American Investment Council in order to rid itself of the words “private” and “equity”?

Evidently, Rabinowitz has never heard of Carl Icahn.

Uncle Carl is arguably at the top of his game right now. Despite spending time as Trump's informal secretary of deregulation, he hasn't slouched on the investing front. He's kept up his public feud with Bill Ackman and launched into a high-stakes foray into federal ethanol policy that could end up making him lots of money.

It's that effort that encapsulates Icahn's give-no-shits approach to public image. As you'll recall, Icahn wants Trump to do an executive order that would benefit CVR Energy, which Icahn controls. Of course, the idea of a billionaire hedge funder whispering sweet nothings into the ear of a president keen on signing big sheets of important-looking paper has made watchdogs apoplectic. And due to pesky lobbying rules, the gambit has forced Icahn to deny the White House adviser role his own company says he maintains, even as he admits to regularly jawboning the president.

For anyone else it would be a really bad look, one that might necessitate a hefty PR campaign to convince John Q. Public that Uncle Carl is just trying to make ethanol refining rules work for ordinary salt-of-the-earth Americans. But Icahn simply does not care.

In a recent interview with Bloomberg, for instance, Icahn sat back, sipped on pineapple juice (not red wine), and casually explained that the reason he was attempting to influence the president of the United States was that he wanted to make a bunch of money.

“I have a right to talk to the president like any other citizen,” he says. “Especially if I think he respects me, why the hell shouldn’t I call him?. … It may sound corny to you, but I think doing certain things helps the country a lot. And yeah, it helps me. I’m not apologizing for that.”

Asked later about his recent decision to effectively short the renewable-fuel credits his company CVR Energy has to deal in – a short that would pay off should Icahn's Oval-Office inveigling work – he was candid in a way that would give any PR handler a stroke:

“I’m not selling ’em, I’m not buying ’em,” the 81-year-old investor said in an interview at his New York office last week. “Hey, this is what I do in the market. I’m taking a chance.”

This is all going down in the midst of a minor motion picture event that features Icahn as the guy who stands to profit wildly from the success of a company widely regarded as a pyramid scheme that ruins the lives of poor people. (It's instructive to compare Icahn here to Ackman, who has poured millions into influencing public opinion on Herbalife, evidently to little avail.)

Has any of this hurt Icahn? Have his people emailed reporters begging them to write stories about how great his charter school chain is? No. At 81 years old Icahn is hitting his stride, and he doesn't care what you think. Whatever you might think of his unseemly White House influence or Herbalife stake, it's impossible to accuse Icahn of dishonesty.

$13 BILLION FUND: The hedge fund industry has a PR problem [Business Insider]
Trump Adviser Carl Icahn Lobbies for Rule Change That Benefits Icahn [Bloomberg]
Icahn Bets Against Renewables Market He Wants Trump to Overhaul [Bloomberg]

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