The Morning Brief: Carl Icahn’s Investment Fund Posts Losses

Here’s a shocker: Icahn Enterprises L.P., Carl Icahn’s main investment vehicle, said second quarter net income plunged to $54 million from $257 million in the comparable period in 2012. What’s more, it reported a $228 million net loss from investments in the second quarter, compared with a $299 million net gain the prior year. However, for the first six months, net gains from investment income were virtually in line with the prior year period. Icahn is known to have huge paper gains in Herbalife and Netflix, to name two high-profile holdings. The legendary money manager no longer has to please outside investors, having returned outside capital in 2011, though his wife may have harsh words for him. “She looks over the numbers and goes, ‘How come it went down today?’” Icahn joked at last month’s Institutional Investor/CNBC Delivering Alpha conference.

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David Harding’s London-based money management firm Winton Capital is tinkering with its investment model, which relies on computer programs to identify opportunities and trade on them. It is making a greater allocation to equities and risk than in the past in hopes of boosting returns, which have been below historic norms of late. Winton is testing the new model with its $40 million Evolution fund, which previously focused on its best trading ideas, according to Reuters. The fund lost money last year after making money in 2010 and 2011. Evolution’s emphasis on equities and risk is now greater than it is at the firm’s $24 billion flagship Winton Futures fund. The firm has also used Evolution’s model for the Winton Diversified Strategy Fund, an onshore U.S. fund the firm launched in July this year.

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More woes for Pershing Square Capital Management’s William Ackman: Shares of J.C. Penney slumped another 3.61 percent to close at $12.80, its lowest price in more than 12 years.

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