Hedge Funds Run by Trump Advisors Made the Most Money Off
His Election Win
Nov.
09, 2016
Hedge funds run by billionaires Carl Icahn
and John Paulson reaped the biggest profits the day Donald Trump was officially
declared the winner of the presidential election. The investors have one other
important factor in common: They both advised Trump on his campaign.
By the time the market closed Wednesday,
Icahn had made more than $700 million on his stock portfolio, according to
Bloomberg data based on his most recent disclosures.
That included a windfall of more than $219
million from his majority ownership in CVR Energy cvi, whose shares surged 24% in the
wake of Trump’s victory. Icahn also made more than $100 million on his stake in
mining company Freeport-McMoRan fcx, which rose
8%, and another $100 million on his stock in his own publicly traded company,
Icahn Enterprises iep
. He scored another $65 million on his massive bet on insurer AIG aig, an investment that’s
currently valued at about $2.8 billino.
Icahn has been a vocal supporter of Trump and
an informal advisor to his presidential campaign, initially landing on Trump’s
short list for Treasury secretary early in the election cycle last year. After
expressing some interest in the job, though, Icahn declined Trump’s invitation
to formally join the candidate’s economic advisory council. Following Trump’s
election, Icahn reiterated to CNBC that he would not accept a cabinet position
in the Trump administration, preferring instead to focus on running his own
business.
The gains reflected by the Bloomberg data may
not be all that Icahn reaped. The billionaire investor attended Trump’s Tuesday
night victory party as the election results rolled in, but left early to load
up on more stock as Dow and S&P futures plunged in the middle of the night,
according to CNBC. Those new holdings are not yet reflected in Icahn’s
regulatory disclosures, so it’s unclear how much he has gained or lost on them
so far. (Icahn did not immediately respond to a request for comment from
Fortune.)
Meanwhile, another hedge fund manager who has
served as one of Trump’s economic advisors, John Paulson, also made a killing
on his election win. The billionaire investor’s Paulson & Co. hedge fund
was up more than $463 million in its stock portfolio on Wednesday, helped by a
surge in the pharmaceutical stocks which represent the fund’s largest holdings.
The Nasdaq Biotechnology Index rose nearly 9%
during the day, its best one-day performance since 2008. Concerns that a
Hillary Clinton administration would impose greater price regulation on drug
companies had put a damper on pharmaceutical stocks for more than a year. That
had knocked billions of dollars in value off Paulson’s top positions, including
Allergan agn , Mylan myl , Teva teva and Valeant Pharmaceuticals vrx (which had also suffered from
other problems including an accounting scandal).
A President Trump, however, is not expected
to crack down on drug pricing, and may also allow pharmaceutical companies to
bring their giant overseas cash hoards back to the
Other winners included the hedge fund Viking
Global, which made more than $250 million during the day, as well as Leon
Cooperman’s Omega Advisors and David Einhorn’s Greenlight Capital, which each
gained more than $80 million. Cooperman had not supported Trump or Hillary
Clinton, while Einhorn had donated more than $50,000 to Democratic political
action committees this year.
Not all hedge funds had a good day,
though—even though the Dow and S&P 500 ended Wednesday up more than 1%
each, proving wrong the universally dire predictions for the market in the
unexpected Trump victory scenario. Trump’s win did punish stocks thought to
benefit from Obamacare, the health care law that Republicans have pledged to repeal.
Tech stocks, thought to thrive more under
That hurt technology-focused hedge fund
Coatue Management, which lost about $58 million during the day, including more
than $10 million apiece on Netflix stock and Activision Blizzard atvi, as
well as American Tower Corp. amt, which sank
6%. Glenview’s Larry Robbins also lost more than $23 million in his hedge fund,
as his pro-Obamacare bets on healthcare companies turned sour: Hospital
Corporation of
Still, the day had started off worse for
Robbins, who had supported Jeb Bush’s candidacy for president: At one point
Glenview was down as much as $100 million, before the healthcare stocks
recovered somewhat later in the day.
Spokesmen
for Coatue and