Carl Icahn
Carl Icahn has given his son Brett $3bn to prove himself as money manager.

Multibillionaire hedge fund manager Carl Icahn, 76, has given his son Brett $3bn (£1.9bn) to play with in the stock exchange and prove himself as money manager.

The stake is 10 times the value of the funds that Brett Icahn already manages and signals his father's plans to pass control of Icahn Enterprises, the family holding worth $24bn, to him, analysts said.

Brett, 33, has been managing $300m of his father's fortune together with another Icahn Enterprises manager, David Schechter, since 2010.

Investing the funds in the "Sargon portfolio", the duo performed strongly prompting Icahn senior to test them further.

"These two guys doubled our money over the last two years. You can't complain about that," Icahn said.

Brett and Schechter will co-manage the $3bn with a mandate allowing them to invest in companies with a value ranging between $750m and $10bn.

Previously they were to target companies worth a maximum of $2bn.

Under the new agreement they will retain 7.5% each of the profit generated from the $3bn, if they can achieve a 4% return annually.

The agreement is to last four years. In 2016 Brett will be allowed to detach the fund from his father's company and manage it independently.

"It's a pretty nice gesture by the old man. If the son doesn't meet the standard Carl is looking for, it gives Brett an opportunity to go out and earn his own," Michael McAllister, a partner at Satterlee Stephens Burke & Burke, told Bloomberg.

Raised in New York, Icahn created his fortune in the 1960s and is known in Wall Street for being a ruthless activist manager.

In his 50-year career he has controlled large stakes in business giants as Texaco and Time Warner.

Forbes values his private fortune at $14bn and ranks him 50th in the world rich list.

Brett has been working alongside his father for 10 years as an equity analyst. He is also a director of Take-two Interactive, the video games maker producing the popular Grand Theft Auto series.