For about a year now, hedge fund manager Phil Falcone’s relationship with his investors has been a bit rocky. While many expressed displeasure at his decision to tie up a good chunk of money in a wireless bet that may or may not pan out, what really set a lot of people off was Falcone’s decision, last November, to loan himself $113 million from a fund in which redemptions has been suspended, in order to pay personal taxes he hadn’t set aside enough cash to cover. Since then, Phil has not only paid the $113 million back, but 1) proved he learned his lesson re: borrowing money from humorless clients (in July he failed to pay $201,101 in property taxes, which he could have loaned himself from you know who but didn’t) and 2) offered investors interested in redeeming the opportunity to receive illiquid shares of his new company, or to sell their stakes on Craigslist. All of which is to say, he’s grown a lot in the last year. BlueLine fund investors, who were told in Harbinger’s most recent letter that their redemptions have been suspended, should keep that in mind.
Sayeth Phil:
“Blue Line was launched in April 2009 with the goal of achieving superior, absolute returns utilizing a fundamental,
bottom-up investment philosophy. Through September 30, 2011, our year-to-date performance for the Onshore Fund and the Offshore Fund is 11.61% and 11.38%, respectively, bringing our cumulative performance to 106.44% and 112.94%, respectively.”[...]
“As you are aware from the Fund’s offering memorandum, the Fund is designed to begin winding up on April 1, 2012. In anticipation of such wind-up, to allow for a prudent disposition of assets in a manner that we believe allows us to best capitalize on the expected value of these assets and in order to protect the interests of all current investors in the Fund, we have determined to suspend voluntary redemptions effective December 30, 2011 (for the Offshore Fund, such suspension was approved by its Board of Directors).”
Wot? You mean he doesn't even have any money left to print up the worthless shares anymore? Toner is about $30 and a ream of paper is $5!
Baseball analogy: A pitcher doesn't "deliver the ball" until after his "wind up".
'Nuff said?
You're assuming he has a ball in the mitt?
–Guy who remembers the old hidden ball trick
They stole my idea for a "bottom-up investment philosphy."
–Ping
He should be suspended from his feet over the brooklyn bridge
Glove.
I thought he was great in the movie Slapshot. I just have a hard time remembering which Hanson brother he played.
This is nothing to be embarrassed about.
–guy who pees in the stall
Secretly I think he wanted to star in Youngblood, but Rob Lowe beat him out for the part
Investors may opt to spend an hour alone with rising pop star Lisa Marie, which, on a market to market basis, are worth about $2.8 million each.
- Harbinger PR
So what happens to the billions UBS lent them?
Am I missing something? You give this guy $1 in 2009, he gets 110% absolute returns in 2.5 years and a few months before closing (which you knew about) he says to people – "dont front run your other investors, i'll get you out together". How is this bad?
I get that he's a [xyz] for the crappy Lightsquared stuff, but what am I missing here?
Hey!!
Does it mean anything that the Fund begins to wind up on April Fool's Day?
Wait, funds give money *back*?
- Former BSHGSCSELF PM
Wow. . . .to owe $113MM in taxes. . . .
I suspect the receipt of a Wells notice played a bigger part.
http://www.reuters.com/article/2011/12/09/us-hedg...
Gating investors is the NKI
maybe it was taking a 100m loan to pay his taxes, maybe it was manipulating bond market prices.. one of those two should be enough to answer ‘why is this bad’ who knows what his actual return is you can redeem your $ so its -100%
http://www.angrybats.com/