Michael Mauer, head of Citi's leveraged syndicate has left the TARP-laden firm to join hedge fund Icahn Associates. Mauer, who was hired in 2001, had previously worked at JP Morgan where he ran the syndicated loan business before the JPM-Chase merger. Mauer's departure comes as Icahn's hedge fund is focusing more on distressed debt opportunities.
Icahn associates, which has returned 4.1% in the first quarter of 2009, and 2% since inception in November 2004, disclosed that its long credit exposure was 52%, with short credit accounting for 10%, resulting in a net credit exposure of 42%. The bulk of Icahn's debt holdings are secured positions (34%) with the balance (18%) in unsecured. In his May 1st investor letter, Carl said:
We anticipate increasing our credit book to take advantage of the once in a generation opportunities that we discussed at our Investor Meetings in March. We expect to manage the credit book in a manner similar to how we have invested on the equity side historically, building concentrated core positions in a few credit names while keeping our sector exposure diversified.
In the equity realm, Icahn was relatively flat, having 49% long exposure and 40% short exposure, for 9% net equity exposure. Amusingly, Icahn, just like any other rational investor with half a brain had this to say about REIT opportunities:
As we said in last quarter's letter, we implemented the short REIT exposure in the fourth quarter, both as a hedge against our long credit exposure, as well as a way to express our view that commercial real estate faces significant deflationary pressures. We continue to believe that REIT values will be hurt due to the sector's inability to access capital, monetize real estate holdings and grow operating income.
Icahn's core holdings include Yahoo!, Motorola, Biogen, Amylin in equity, and TXU, Harrah's, Realogy and Tropicana in debt.