Brett Icahn shares a name with his father Carl, but not an explosive dynamic, when it comes to investing, but its early in his career.
His one-year investment in Hain Celestial Foods is his “baptism,” a source following the situation said, and “he has done reasonably well with a different play book than his father.”
Others look at his picks and say the sector is right but other companies have had better returns.
Brett, 31, the likely hand-picked successor to his father’s empire, last year landed his first big investment, the source said. He came up with the idea of investing in Long Island natural foods giant Hain Celestial Group.
Icahn Associates, as usual, after buying a stake, successfully angled for a board position. Brett in July 2010 assumed a seat as the youngest director.
However, unlike his father, Brett has basically let Hain management execute, and its shares have risen.
Some detractors say his inexperience could attribute to his lack of aggression within board meetings. While others speculate that as a son of privilege he lacks his father’s “street smarts” and humble Far Rockaway, Queens upbringing that Carl brings to bear in his adversarial boardroom demeanor.
Carl is typically seen as the gruff outsider, while Brett sees board members as peers.
Hain for its part says we changed not stratic planning after Icahn took his stake.
“We have followed through on our strategic plan that was in place before the Icahn investment,” the company said.
Brett is seen as constructive during Hain board meetings, another source said who cannot speak for the company.
This lies in contrast to father Carl who is in the news this week for rattling companies.
Carl is defending himself in a fraud suit alleging that he depressed the share price in telecom company XO Communications so as to increase his holdings and get at its $4 billion in net operating losses that he could apply to his other companies.
Not only that but he has also made another hostile bid for Clorox that has been rejected, and has succeeded in pushing through a controversial restructuring at utility Dynegy.
“Brett is learning a different way to make money,” the source following the situation said.
A source who knows the Icahns well said, “I think Brett is first and foremost a value investor,” meaning investing in undervalued companies, with large upside potential.
The source said it would be fair to assume that Brett might be more willing to give management time to prove that they can execute their strategy than Carl, 75, though he still could be tough if he felt they needed a push.
Brett has proved adept at finding undervalued stocks.
In May, 2010 Icahn disclosed it had bought a 12 percent stake in Hain that was hovering at $20 a share, not far off its 52-week high.
Now, the shares in a little over one year have risen more than 50 percent to $32, netting Icahn a healthy $50 million paper profit.
Hain has risen along with the few natural food stocks. The company’s biggest customer is Whole Foods, and its shares have soared 72 percent over the same period.
The plan at the time, most thought, was that Icahn bought its Hain stake planning to put the business in play, believing another food giant looking to own healthier brands would covet Hain that owns Celestial Seasonings teas, Terra Chips and Soy Dream.
If Carl was on the board he would have pushed Hain to start a sales process, but Brett once he took a director seat took a more patient stance, the source said.
A source inside Icahn’s camp says this is actually Brett’s second big investment, the other being Manhattan video game maker Take-Two Interactive.
Brett’s pattern of behavior is similar in that situation.
Icahn first took a position in 2006 in the maker of “Grand Theft Auto,” and Brett became a director in April 2010.
By spring 2010, the company had games in development that later became very successful, including “Red Dead Development,” which boosted its stock.
Take Two’s shares have risen 35 percent since Icahn became a director rising from about $10 a share to $13.49.
Electronic Arts, the larger game maker, has risen over 40 percent in the last year.
Since its initial investment, Icahn has made $100 million from Take-Two, an Icahn source said.
The Icahns declined comment.