Let’s role-play for a second. You’re a well-known hedge fund manager who’s had a really, really shitty 18 months. Your investors hate you, because of petty little stuff like 1) you loaned yourself $113 million from a gated fund to pay personal taxes 2) you tied up a good chunk of their money in a walkie-talkie passion project 3) you will only let them leave if they can find a buyer for said passion project on the black market and you both know that’s not happening any time soon. It appears as though you’re somewhat past due on paying property taxes. The deal you’ve bet pretty much everything on may be fucked. Your singing and dancing pig, the one person you thought you could count on and who, even if you lost everything, would still make you feel like a rich man, has started not just considering her options but unapologetically flaunting them in your face. (You didn’t need Wilbur to have her date– a potential new benefactor and the third this week– pick her up just as you were getting home to see them leave and you really could have dealt without hearing him ask “Who’s that guy?” and hearing her cruelly laugh and answer, “Oh him? He’s nobody”?). So when the SEC, which has been investigating what you’ve been up to, offers you a deal to settle by agreeing to be banned from the securities industry, what do you do? Do you say, “You know what, that actually sounds great,” because honestly, what are you holding onto anymore? This way, you can start fresh. Give the double-finger fuck you to everyone and take off? Maybe that’s what you do if you’re you but in this scenario you’re Phil Falcone and you’re not going anywhere. Throw in the towel, his ass. Continue reading »
Harbinger Capital Partners
You know who could use some good news right about now? Phil Falcone. You know what doesn’t constitute good news? This crap: Continue reading »
Earlier this week, Phil Falcone notified investors in his Credit Distressed BlueLine Fund, in advance of a previously announced April 2012 wind-up. Today, he sent out a letter notifying investors in Harbinger Capital Fund I, Harbinger Capital Partners Offshore Fund I, Harbinger Capital Partners Fund II, and Harbinger Capital Partner Offshore Fund II that they should “anticipate” having redemptions frozen as well, on account of the Well Notice received by the SEC. Happy Holidays. [WSJ]
You’re Going To Have A Lot Of Time To Run Your Fund When You’re Running It In A Van Down By The River
By Bess Levin
When all is said and done, there are two types of people in this world: those who would feel comfortable conducting or taking part in a “business” meeting held in an unmarked van and those who would not. It’s important you know which camp you belong in, because according to the Times, the travelling office is officially a thing.
Steve Kantor admits that he likes to travel in style. He is an affable investment banker, concerned about flaunting his wealth, but he drives around Manhattan in what looks like a simple black delivery van. Of course, most vans do not have chauffeurs, as Mr. Kantor’s has. Or a built-in office, custom installed. “I have two big-screen televisions; I have a couch in the back that goes into a bed,” Mr. Kantor said. “I have four chairs that go back and massage you. It has a desk, a table and an intercom so you can have meetings in there if you want to.”
The most popular model is made by Mercedes: a stripped-down, basic version of the van, the Sprinter, starts at $41,315; Mr. Kantor’s version, which Mercedes-Benz Manhattan arranged to have customized, is fitted with satellite television, a Wi-Fi network and flat-screen monitors, and sells for $189,000. Even that is not quite enough for some New Yorkers, who employ designers to install even pricier custom details that easily drive up the total cost to $500,000…And although the modified Mercedes van is popular in several large cities, Howard Becker, president of Becker Automotive Design in Oxnard, Calif., said New York, with its executives in hedge funds and finance, had become his best market…[some owners request] the installation of a vacuum cleaner so the chauffeur can remove every crumb and grain of sand…the vacuum option could be seen on a recent morning on Park Avenue, when Carmelo Umpierre, a 44-year-old chauffeur, idled the $425,000 van he drives for an executive based in Connecticut.
And these things don’t just appeal to people who are attempting to up the sketch factor of their business dealings by leaps and bounds (“Martin Brass, a 43-year-old former Wall Street executive turned investor…said he simply wanted to “have meetings and presentations in those vehicles”). Apparently 18 years and no pre-nup also means family car/conference room. Continue reading »
-
Posted in:
Hedge Funds
Maybe Phil Falcone Had A Good Reason For Waiting To ‘Til The Month Was Almost Over To Report September’s Losses
By Bess LevinHe could have been busy putting the finishing touches on Wilbur‘s Halloween costume (he’s going as a slutty butcher** this year). You don’t know. Continue reading »
-
Posted in:
Hedge Funds
Confidential To Harbinger Capital Investors: Phil Has Been Working His Ass Off To Find People With An Investment Time Horizon Of Infinity. A Little Gratitude Would Be Nice.
By Bess Levin
Pop quiz: you’re a hedge fund manager named Phil Falcone. Your relationship with your investors has been on the downhill since you loaned yourself $113 million from a gated fund in order to pay personal taxes you didn’t set aside enough cash to cover. You apologized after the fact but apparently that wasn’t good enough, because they’d already moved on to freaking out over your decision to tie up much of their capital in a side project building walkie-talkies that might not pan out on account of the growing opinion that it might kill a few people. A bunch of them asked for their money back and although you weren’t really in a place to be offering any cash refunds, in July, you came up with what you thought was a pretty genius alternative plan to offer them, in place of actual money, illiquid LightSquared equity. Great idea, right? You thought so, too, but noooooo, they didn’t like that.
At this juncture, most money managers would’ve said, you don’t like that? Well door number two is the option to go fuck yourself. But not you. Even with everything you’ve got going on, from your pissy investors to getting killed on the walkie-talkies, to the boss riding you, to a prima donna named Wilbur who doesn’t let a day go by without not only letting you know he’s got options but flaunting them in your face, you went back to the drawing board. And there, you came up with something even better. Continue reading »
-
Posted in:
Hedge Funds
Phil Falcone Has Great News For Harbinger Capital Investors, Less Than Great News For The City Of New York
By Bess Levin
Over the last 10 months or so, the relationship between hedge fund manager Phil Falcone and his investors has not exactly been mutually satisfying. Not that they’ve been keeping a list but, if pressed to get into specifics, Harbinger Capital clients might cite a few reasons why they’ve been less than thrilled with Falcone of late such as: 1) The lackluster returns in Harbinger Capital’s flagship, which have in no way mimicked the highs of 2007. 2) That time he told reporters his investors are idiots. 3) The fact that he’s come to adopt a loose definition of the term ‘hedge,’ and put a whole lot of their money in a wireless venture that the universe seems hell bent on making sure never even has the chance to cause GPS interference. 4) The note those who requested their money back received in July, informing them that rather than getting cash, they’d be the lucky recipients of illiquid LightSquared equity. And then there would be the incident about which they really get pissy, and where things started to go down hill: 5) The time Phil choose to “loan” himself $113 million from a gated fund in order to pay personal taxes. Today, however, brings word that should do a lot to smooth ruffled feathers. On points 1-4, not much to say there. No one changes in a day. But! On point 5? Big progress. Huge. Continue reading »
-
Posted in:
Hedge Funds
Next Time You Want To Ask Phil Falcone A Question, Make It One You Don’t Already Know The Answer To
By Bess Levin
LightSquared is a wireless venture that seeks to create “convenient connectivity for all.” But, as the careful listeners among us know full well, it stands to do much more. In short, it will make or break backer Harbinger Capital. Success will mean billions for manager Phil Falcone and his investors. Failure will mean Wilbur Falcone going back to where it all began, peddling ZJ’s on the 5:54 Metro North to Greenwich.
As one can expect when one is doing ground-breaking, visionary-esque work, LightSquared has encountered some opposition. The yachting community worries the interference will cause them to get lost at sea. The National Oceanic and Atmospheric Administration says it “may degrade precision services that track hurricanes, guide farmers and help build flood defenses.” Mars is similarly pissed.
The most recent hostility came last week from various parties claiming that the White House pressured certain officials to change their testimony before Congress to favor LightSquared, in order to help the network’s plans to move forward. Now, any and all donations the company’s CEO and Falcone have made to Democratic organizations are being scrutinized. Earlier this morning, Phil told Fox Business that allegations of influence via money sicken him (“People think we’ve made contributions to grease the wheels, that is so wrong, it’s disgusting,”) and this afternoon, took the time to explain the impetus for one donation in particular. Apparently all roads lead back to a woman with many fans round these parts. The First Lady of the hedge fund industry. Her Excellence: Lisa Maria Falcone. Continue reading »
-
Posted in:
Hedge Funds
So The White House Maybe Pressured Space General To Change His Testimony To Favor Harbinger-Backed Lightsquared, So What?
By Matt Levine
The four-star Air Force general who oversees U.S. Space Command walked into a highly secured room on Capitol Hill a week ago to give a classified briefing to lawmakers and staff, and dropped a surprise. Pressed by members, Gen. William Shelton said the White House tried to pressure him to change his testimony to make it more favorable to a company tied to a large Democratic donor. …
Now the Pentagon has been raising concerns about a new wireless project by a satellite broadband company in Virginia called LightSquared, whose majority owner is an investment fund run by Democratic donor Philip Falcone. Gen. Shelton was originally scheduled to testify Aug. 3 to a House committee that the project would interfere with the military’s sensitive Global Positioning Satellite capabilities, which control automated driving directions and missile targeting, among other things. According to officials familiar with the situation, Shelton’s prepared testimony was leaked in advance to the company. And the White House asked the general to alter the testimony to add two points: that the general supported the White House policy to add more broadband for commercial use; and that the Pentagon would try to resolve the questions around LightSquared with testing in just 90 days. [Daily Beast, earlier]
As you know, Harbinger Capital has a big bet going on a wireless company called LightSquared. Should it succeed, Phil Falcone will make billions and his investors will receive the triple digit returns they scored on subprime. Should it fail…it’s an outcome to dire to even think about but will most likely involve the Grammy-award winning Wilbur Falcone being forced to go back to playing Three-card monte in the UBS parking lot just to put food on the table. While LightSquared has so far encountered some opposition (as one often does when one is doing groundbreaking, visionary-esque work), the company has most recently been making the case that its satellite system will be huge for “coordinating enforcement and emergency response teams during natural disasters, like Hurricane Katrina.” According to various US agencies, it’d be the least they could do, as LS might screw up the tracking of future natural disasters.
Philip Falcone’s LightSquared wireless service needs more testing because it may degrade precision services that track hurricanes, guide farmers and help build flood defenses, Congress is being told today. LightSquared’s signals may disrupt precise gear that reads data from the satellite-based global-positioning system, the National Oceanic and Atmospheric Administration, the Transportation Department and a federal advisory body said in testimony prepared for a hearing by the House science committee.
“We support further testing of LightSquared’s proposal,” Mary Glackin, a deputy under secretary at NOAA, said in the testimony obtained by Bloomberg News before the hearing. Concerns include LightSquared’s potential effect on a satellite system that increases accuracy of hurricane tracking, Glackin said. Options for mitigating interference would be limited because the GPS satellites are in orbit and cannot be modified, she said.
According to LightSquared, Glackin and her friends can go fuck themselves. Continue reading »
DoJ Tries To Block AT&T/T-Mobile Merger; Not Yet Taking Competition From LightSquared Seriously
By Matt Levine
LightSquared, the wireless-broadband company owned mostly by Harbinger and its disgruntled former investors has had a good run recently, announcing a spectrum deal with Sprint, helping with Hurricane Irene, and not actually killing anyone yet (that we know of). You might think that it’s well on its way to fulfilling its mission of increasing competition in the wireless broadband industry.
But it’s not enough for the Department of Justice, which today sued to block the proposed AT&T/T-Mobile merger. The DoJ’s suit relies on the conclusion that wireless is basically a 4-party national game (among T, VZ, S, and T-Mobile), and gives short shrift to the notion that smaller regional wireless companies can be counted on to provide competition and limit price gouging by an engorged AT&T. From the complaint:
Continue reading »
