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‘The big mall short’: Icahn scores $1.8b betting against shopping centres

Star investor and corporate raider Carl Icahn’s bet on the downfall of brick-and-mortar retailers produced a $US1.3 billion ($1.82 billion) gain during the first half of the year as they struggled in the coronavirus pandemic.

The profit came from a short position on [bet against] commercial mortgage-backed securities, Icahn Enterprises said on Monday in a regulatory filing. Icahn’s publicly traded holding company has committed capital to his proprietary investment funds and thus reports on their returns quarterly.

Carl Icahn made a profitable bet against brick-and-mortar retailers.

Carl Icahn made a profitable bet against brick-and-mortar retailers.Credit:AP

Icahn, 84, began making the bet, frequently called the “mall short,” in mid-2019 by purchasing credit default insurance using CMBX 6, an index highly exposed to shopping mall loans.

The likelihood of bad loans and credit defaults soared in March as the COVID-19 pandemic led to store closures and prompted more consumers to shop online, accelerating a trend already well underway.

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