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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.

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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.

Harbinger Capital partners LLC, the $6 billion hedge fund run by Philip Falcone, told clients who’ve been unable to withdraw all their money for almost three years they can sell their stakes to a third party, according to a letter obtained by Bloomberg News. “We are exploring several options in an attempt to accommodate investors,” Falcone said in the letter, dated yesterday. Harbinger, based in New York, said it would put investors in contact with unnamed “potential purchasers” who have approached the firm. It also will allow investors to strike their own deals with other bidders they may find. Transactions are subject to final approval by Harbinger, the firm said.

If anyone thinks this whole "we know a guy" thing sounds like just a bunch a smoke, think again. We have it on good authority that Phil has indeed has been making the weekend rounds at the Tri-state area's best garage sales and flea markets for guys that might be in the market for quirky little numbers. If you think you can do better unloading this stuff yourself, as stated in the letter, be his guest.

Harbinger to Allow investors to Sell Stakes in Locked-up Funds [Bloomberg Brief]


Who Wants To Invest In Phil Falcone's New Company?

Harbinger Global Corp is coming to an exchange near you. Phil Falcone, the embattled billionaire hedge fund manager, has put together an unorthodox IPO that will see his hedge fund firm contribute assets valued at $350 million to a blank check company that will trade publicly. In the deal, a special purpose acquisition company that is expected to trade on Nasdaq and be known as Harbinger Global Corp., will acquire a majority interest in an MGM-branded hotel and casino development in Vietnam and a minority interest in an iron ore producer working in Brazil. Funds run by Falcone’s Harbinger Capital Management that are contributing the assets will get an ownership stake that could be as high as 96% in Harbinger Global and Falcone is slated to become executive chairman of the company. Falcone’s move to become closely involved in a publicly-traded company is audacious given that he is currently facing securities fraud charges from the Securities & Exchange Commission. Yeah, well, people also thought it was audacious for him to invite a burlesque dancing pig he barely knew to come and live with him and she turned out to be the best thing that ever happened to him, so.

The Only Thing That Keeps Phil Falcone Up At Night Is Counting All The Money He's Going To Make Off Of LightSquared

From outward appearances, the past couple years have been a stressful time for Phil Falcone. After making billions of dollars for himself and for his investors on subprime, the Harbinger Capital Partners founder provoked the ire of many a client by tying up a good chunk of their money in a wireless start-up called LightSquared (a company the Federal Communications Commission is no fan of, due to the fact that it reportedly interferes with GPS devices used on land, sea, and in outer space), by borrowing $113 million from a gated fund in order to pay personal taxes, and by only allowing certain investors (Goldman Sachs) to get out while freezing redemptions for others and then telling them they could leave if they found some else to pick up their stake. Assets under management at Harbinger have dropped $23 billion, from a peak of $26 billion. For a variety of reasons, the Securities and Exchange commission wants to see him banned from the industry. A worried Bloomberg News reporter recently revealed he has a problem with pit stains ("[his] shirt appeared darker under the arms in his office last month"), which wouldn't pose an issue were his shirt supply not dwindling rapidly ("One place Falcone is visiting less frequently is Domenico Vacca, the New York boutique where suits retail for $3,900 and shirts $490, according to a person with knowledge of his purchases. He orders every four or five months [now] compared with every two or three months between 2006 and 2009"). For all these reasons and more (like, say, a sensitive and highly-strung pig who is not happy), some people might assume that Falcone would at best be in deep contemplative mode regarding how things got this far at worst be freaking the fuck out, particularly over the possibilities that 1) the SEC is going to file civil fraud charges and 2) if LightSquared doesn't pan out, he's going to lose a whole lot of money. Those people, however, would be wrong. Not only is he not at all worried that his passion project won't work out ( “I am not losing sleep on this -- why would I lose sleep?” he asked Bloomberg), but he dares anyone to come up with a reason for why he's not going to make $20+ billion on this thing. “This is not for the faint of heart,” Falcone said. “I’ve never looked at it as having $4 billion or $25 billion as defining Philip Falcone. But who’s to say I won’t get back to $25 billion?” What? It could happened. You don't know. Falcone Waits for Icahn Doubling Down on Network [Bloomberg]