Falone has let the money be a very public part of his life. To some the explanation is simple: Lisa Maria Velasquez. As a friend of Philip’s tells me, “He likes the insanity” [Vanity Fair]
Lisa Falcone
If This LiqhtSquared Bet Goes According To Plan, Phil And Lisa Maria Falcone Will Be Able To Buy A Whole House Of Dancing Pigs- And Ones For Their Haters, Too
By Bess Levin
For the latest issue of Vanity Fair, reporter Bethany McLean got personal with one of our favorite hedge fund couples, Phil and Lisa Maria Falcone. If you’ve been keeping up with the travails of the Harbinger Capital founder and his wife, you know that despite living in a 25,725-square foot mansion on 5th Avenue (which was renovated to include a bar inside Lisa’s closet), a few billion or so in the bank, unparalleled eyes for fashion and Manhattan’s premier singing and dancing pig who can also play the piano, the last couple years have not been the easiest for the Falcones. Everywhere they turn they feel like people are beating up on them, taking shots. To their chagrin and bewilderment, New York “society,” for the most part, doesn’t accept Lisa and many of Phil’s investors, when they’re not being held by a gate, have run for the hills, causing Harbinger’s assets under management to drop from a peak of $26 billion to $7 billion and counting. Things have gotten so bad, in fact that, several months back, Falcone “almost took off the Ganesh charm- the elephant-headed Hindu deity that represents good fortune- that he wears around his neck.” As he told McLean, “I thought, You have got to be kidding. I get very superstitious.”
But he kept it on and why? Because 1) You have not seen the best of Phil Falcone yet:
“You take your lumps and get your bruises. you get knocked down. The key is getting back up,” Falcone says. “I’m already standing. I’m 48. It’s not even the second period of my career, and I’ve had a pretty good first period.”
And 2) Phil’s got a big bet in the works, one that he’s pretty sure will shut everyone up, about everything, if the elephant can pull through for him. You know the one. LIGHTSQUARED. Yeah. Just let it sizzle there, in the air. It’s going to be huge and then all you people are going to be begging to invest with the best.
“I think [the wireless bet] could be bigger than subprime for me,” he says.
You know what else it will rival? Hairbrushes. Read more »
A Certain Someone’s Lack Of Earnings Power Means No Presents For Boys And Girls This Year
By Bess Levin
Standing on a black AstroTurf platform and in Dior black lace, Lisa Maria Falcone told 900 guests at the Friends of the High Line benefit, “Unfortunately, I have no surprises tonight.” A board member of the elevated park and co-chairman — with her husband, Philip Falcone — of this year’s benefit, Falcone was alluding to a spontaneous $10 million gift she announced at the organization’s fundraiser two years ago. [Bloomberg]
Earlier this week it was reported that Harbinger Capital’s chief investment officer, Lawrence M. Clark Jr, had resigned to start his own fund. According to Reuters’ Matthew Goldstein and Emily Chasan, several other employees will have parted ways with Phil Falcone, though their departures were less than voluntary. Read more »
Today alone we’ve received two bad pieces of news re: bonuses. Expectations at JPMorgan are that they’ll be down 10-15% and at Morgan Stanley, nearly 30%. But! Employees at some firms– be they Goldman, hedge funds, whoever– must be expecting to fare better based on a little word from a little fella. Read more »
The last month or so has not been the best of times for Phil Falcone. Harbinger Capital’s flagship is down, Goldman Sachs, Blackstone and some others have pulled their money, investors have been giving him shit for borrowing $113 million from one of his funds (where redemptions had been frozen) in order to pay personal taxes, he had to put up his art as collateral to borrow even more cash (for what, it’s unclear), he’s being investigated by the SEC and every time he drives down the road he just wants to jerk the wheel into a god damn bridge abutment.
First, though, he’d like to put some rumors to bed, and in a profile with the Times yesterday, did just that.
* On the hideous suggestion he’s got a liquidity problem:
Mr. Falcone has been selling investments. He has unloaded stakes in Citigroup and The New York Times Company and a $650 million investment in Inmarsat, a British satellite company. All of this has led to speculation in the hedge fund community that Mr. Falcone and his firm are confronting a cash squeeze. If more investors withdraw money, the whispers go, Mr. Falcone could be in trouble. Nonsense, said Mr. Falcone in an interview in his office. “The last thing I’m thinking about in the morning is whether I have a cash-flow problem,” he says.
* On people not getting that he loaned himself investor money because he really needed it and not because he was just dicking around.:
A little more than a year ago, Mr. Falcone took a $113 million personal loan from the fund, a move that was vetted by his lawyers, he said. Mr. Falcone said a big chunk of his personal wealth is tied up in his own funds. “It’s not like I have $113 million in my checking account,” he said, chuckling.
From the mailbag: Read more »
According to a filing, the investigations are looking at “particular investments and trading in securities of particular issuers,” and it’s unclear as to who is conducting the probe (or if it’s related to the inquiry the Securities and Exchange Commission reported last week). One thing, however, is clear. Read more »
Late last week, it was reported that in Phil Falcone had loaned himself $113 million from one of Harbinger Capital’s funds, where redemptions had been suspended, in order to pay personal taxes. The hedge fund manager said he checked with his lawyers before borrowing the money but investors still were fairly miffed anyway. Goldman Sachs pulled its entire investment, as did Blackstone, and one client informed Reuters, “You can’t treat the fund like a personal piggy bank to pay taxes. I don’t know that there is really anything illegal about it, but it is certainly disgustingly immoral and shows a complete lack of fiduciary care.”
Which is why the sensitive ones in the bunch should be thrilled to hear that the next time Falcone needed a little money, he simply went to the bank and asked for some coin to tide himself over, rather than taking it out of their pockets and risking another lecture from mom and dad about “right” and “wrong.”
Earlier this month, Falcone and his wife posted some of their “fine art” as collateral for a secured five-year loan from Bank of America, public records show. The so-called security agreement between Bank of America and the Falcones was filed with the New York Secretary of State’s office on Nov. 4.
Goldman Sachs Pulls $120 Million From Harbinger Capital After Falcone “Loans” Himself Money From Other Fund
By Bess Levin
Bloomberg reports that Goldman Sachs plans to pull its entire investment from Harbinger Capital’s flagship fund, for two reasons. 1) The returns weren’t very good and 2) Falcone “borrowed” $113 million from one of his firm’s smaller funds (where redemptions had been suspended) in order to pay personal taxes. Read more »
In our long and highly scientific study into the lives of Harbinger Capital couple Phil and Lisa Falcone, one thing we’ve determined is that Lisa, God’s gift to us, is not your typical hedge fund wife. For instance, most of these women would not commandeer a conference room at their husband’s office blasting music with the lyrics directing “bitches, throw your hands in the air,” citing 18 years of marriage and no pre-nup to mean “shared family office.” Most of them would not hire “little people” for their daughters’ birthday, or bring a piano-playing pig into the house or dance on a table in view of photographers. In sum, most of these women play by the rules, figuring that’s the price they’ve paid, whereas Lisa lives by the motto “I do what I want.”
One of the things Lisa has most notably wanted to do, which her fellow Hedge Fund Wives will not, is take an out of the box approach to fashion. Gladiator outfits? Yes, please. Mermaid Chic? Don’t mind if I do. Slutty Peacock? Bring. It. On. And while the fact that Phil clearly loves Lisa for who she is and has no interest in forcing her to act like one of them should be refreshing, some people have still questioned how he is comfortable with these get-ups, wondering if they attract too much attention and scare of potential and existing investors, whose hands must all times. What is the deal here? A profile on Phil in the latest issue of Bloomberg Markets that touches on his early life sheds some light. Read more »
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