Thursday, February 17, 2011
Omar Asali - Goldman Sachs Hedge Fund Strategies
"In February, Harbinger hired Omar Asali, who was previously co-head of Goldman Sachs Hedge Fund Strategies, to be responsible for global portfolio strategy and portfolio analytics. He will also assume certain risk management duties, the letter said."
best distressed investor on the planet
Falcone Starts Fund as Harbinger Client Money Remains Locked Up
Philip Falcone, Harbinger Capital Partners
March 20 (Bloomberg) -- Philip Falcone, who runs the $7 billion Harbinger Capital Partners LLC, is starting a hedge fund that draws on his background in distressed securities, even as investors are locked into his biggest fund.
The Credit Distressed Blue Line Fund will buy troubled loans and bonds, and bet against higher-rated debt, the New York-based firm said in a March 16 letter to investors. The firm’s flagship $5 billion Harbinger Capital Partners Fund I limited withdrawals to 65 percent of its assets last year because of private-equity investments, which are harder to sell than publicly traded stocks.
“We hired Falcone because he was the best distressed investor on the planet, and then he morphed into an equity manager who took big bets with an activist bent,” said Brad Alford, head of Alpha Capital Management LLC in Atlanta and an investor in Harbinger Capital Partners.
“Now, he decides to launch a credit fund while 35 percent of our capital is stuck in private equity.”
Harbinger’s assets have fallen about 73 percent from a peak of $26 billion in mid-2008 because of investment losses and client withdrawals.
Capital Partners I declined 28 percent last year, exceeding the 19 percent average loss for all hedge funds, according to Chicago-based Hedge Fund Research Inc.
Charles Zehren, a spokesman for the fund, declined to comment on the new fund and the letter, a copy of which was obtained by Bloomberg News.
Equity Investments
Falcone, 46, started his main fund almost eight years ago to focus on distressed debt. Bonds are considered distressed if they yield 10 percentage points more than Treasuries with similar maturities, indicating investors are concerned that the issuer will default.
They typically buy such debt to bet that a company can renegotiate loan agreements to avoid bankruptcy or to reap gains in liquidation.
Falcone later diversified into equity investments that included stocks of companies going through changes such as mergers or spinoffs, and private-equity holdings. He also takes concentrated positions in companies.
Falcone last year became a 20 percent owner of newspaper publisher New York Times Co., which he is pushing to sell assets and pursue digital businesses.
Investors in Capital Partners may ask Falcone to let them switch to the new fund and not pay fees until their losses are recovered, said Brad Balter, head of Boston-based Balter Capital Management LLC, who invests in hedge funds.
“In this environment, everything should be done to benefit the investor,” he said.
Revenue Drop
Last year was the worst on record for hedge funds, which lost about $600 billion in assets because of sour investments and client withdrawals.
More than 18 percent of all hedge-fund assets, managed by 5 percent of firms, were subject to some sort of withdrawal restriction last year, according to Peter Douglas, principal of Singapore-based consultant GFIA Pte.
Harbinger’s fee revenue has fallen since 2007, when the flagship fund more than doubled on gains by metals companies and wagers against mortgages. The firm managed about $11 billion at the end of 2007.
Clients who were invested in the fund in 2008 won’t have to pay the 20 percent performance fee until their losses have been recouped. The fund, which climbed 5.6 percent in January and February, needs to rise 39 percent to make them whole.
Falcone is starting the distressed fund to “seek to capitalize on the current dislocation in the credit markets,” he wrote in his letter. The new fund will buy credit-default swaps, which act like insurance against loan going bad.
It will purchase devalued high-yield bonds, bank loans and trade claims, which are debts that a bankrupt company owes to its suppliers. The fund won’t borrow money to make purchases, nor will it buy stocks.
$1 Billion Cap
Harbinger expects the fund to be capped at $500 million to $1 billion, and to wind down after the credit crisis subsides.
Falcone will manage the Blue Line Fund in the same way as the main Capital Partners Fund between its start in June 2001 and March 2004, when the last distressed-credit cycle ended.
During that time, the fund returned about 22 percent a year, on average. Since inception, it’s climbed about 20 percent, compared with a loss of 4.9 percent for the Standard & Poor’s 500 Index.
In the main fund, Falcone is shifting capital to distressed debt and will make the same credit investments as in the new fund. He’s been shifting money out of equities, though he will continue to own stocks.
Harbinger will ask shareholders to vote on new fee and redemption policies at a meeting scheduled for March 27.
Trimming Positions
The fund is proposing reduced management and incentive fees for investors who agree to have their money initially locked up for two years rather than one.
So far this year, Falcone has trimmed positions in iron-ore producer Cliffs Natural Resources Inc., cable-television provider Cablevision Systems Corp., truckmaker Navistar International Corp. and coal producer Consol Energy Inc, the letter to investors said.
Falcone has also covered some of his bets on falling shares of metals producers and diversified financials stocks. He unwound some of his positions in credit-default swaps on sovereign debt and monoline bond insurers, the letter said.
He’s staying put with his largest equities positions, including the New York Times stake and a 25 percent holding in power producer Calpine Corp.
Private-Equity Fund
The fund added to its credit positions, including trade claims on an energy company, which Falcone bought for 50 cents on the dollar, and credit default swaps on European retailers, consumer products and service companies.
Falcone also started a private-equity fund with a Korean company as an anchor investor, according to the letter.
The Global Opportunities Breakaway Fund LP has a five-year term, and will draw down capital as it makes investments. Harbinger plans to open a Singapore office as part of the management of the new fund, the letter said.
Harbinger earlier this year bought back an undisclosed stake from Birmingham, Alabama-based Harbert Management Corp.
Harbert oversees about $9 billion, according to its Web site.
Separately, Harbinger hired Peter Jenson, a former controller at Citadel Investment Group LLC in Chicago, as chief operating officer. The hiring was reported March 18 in Hedge Fund Alert.
In February, Harbinger hired Omar Asali, who was previously co-head of Goldman Sachs Hedge Fund Strategies, to be responsible for global portfolio strategy and portfolio analytics. He will also assume certain risk management duties, the letter said.
To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net
To contact the editor responsible for this story: Larry Edelman at ledelman3@bloomberg.net
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aCgUvUYwBys0&refer=home
Phil Falcone of 'buying' White House influence
Opalesque Exclusive: U.S. group accuses Phil Falcone of 'buying' White House influence for his satellite broadband company
From Precy Dumlao, Opalesque Asia:
The National Legal and Policy Center (NLPC) has asked the House Committee on Oversight and Government Reform to investigate the Federal Communications Commission (FCC) for allowing Phil Falcone-backed LightSquared to use satellite airwaves to provide broadband services using spectrum for free. The NLPC alleged that Falcone may have bought influence with the White House by making large contributions to the Democratic Senatorial Campaign Committee (DSCC).
In his letter to the House Committee, NLPC Chairman Ken Boehm said Falcone took advantage of a loophole in the FCC guidelines that allowed LightSquared to receive spectrum for free while competitors have to pay billions of dollars.
What's suspicious with the FCC move to grant Falcone's company's request to drop a requirement that cellphones using satellite airwaves must be able to communicate with satellites, was that it came after the hedge fund manager, his wife, and his business partner made huge contributions to the DSCC.
Boehm presented White House visitor access logs which showed that Falcone and LightSquared CEO Sanjiv Ahuja met with the White House Chief......................
Wednesday, February 16, 2011
Applica - Nacco - Harbinger Capital Partners
Harbinger Pays $60 Million to Settle Suit
By MARK MAREMONT
Prominent hedge fund Harbinger Capital Partners paid $60 million to settle a lawsuit alleging that it improperly interfered in a 2006 takeover battle and received nonpublic information about a rival's bid, according to a regulatory filing.
Nacco Industries Inc., the plaintiff, said in the filing that it reached the settlement agreement Monday with Harbinger and others associated with it, two weeks before a scheduled trial. Cleveland-based Nacco's stock rose 8.8% to $119.72 in afternoon trading on the New York Stock Exchange.
A spokesman for Harbinger didn't immediately return a phone call seeking comment.
Earlier
Judge Knocks M&A 'Fig Leaf' I
New York-based Harbinger, run by Philip Falcone, at one point managed $26 billion, but recently oversaw closer to $9 billion. The firm is known in the hedge-fund industry for its role in pushing for corporate changes at companies where it has held a significant ownership stake, including New York Times Co.
The lawsuit, in Delaware Chancery Court, stemmed from a 2006 battle between Nacco and Harbinger to buy Applica Inc., which marketed appliances licensed under the Black & Decker name. Nacco, which sells appliances under the Hamilton-Beach name, struck a deal to buy Applica, but eventually lost the target to a higher bid by Harbinger.
Nacco alleged that, while it was in confidential talks to buy Applica, the target company's executives were secretly helping Harbinger mount its rival bid. Among the allegations was that Applica executives passed tips on the Nacco negotiations to Harbinger through a consultant working for the hedge fund. The consultant later became a Harbinger employee.
Both the consultant and Harbinger strongly denied receiving any non-public information and denied any improper interference in Nacco's bid.
Harbinger amassed a 40% stake in Applica before Nacco's bid was announced, then used that advantage to win the takeover battle, the lawsuit alleged.
Write to Mark Maremont at mark.maremont@wsj.com
By MARK MAREMONT
Prominent hedge fund Harbinger Capital Partners paid $60 million to settle a lawsuit alleging that it improperly interfered in a 2006 takeover battle and received nonpublic information about a rival's bid, according to a regulatory filing.
Nacco Industries Inc., the plaintiff, said in the filing that it reached the settlement agreement Monday with Harbinger and others associated with it, two weeks before a scheduled trial. Cleveland-based Nacco's stock rose 8.8% to $119.72 in afternoon trading on the New York Stock Exchange.
A spokesman for Harbinger didn't immediately return a phone call seeking comment.
Earlier
Judge Knocks M&A 'Fig Leaf' I
New York-based Harbinger, run by Philip Falcone, at one point managed $26 billion, but recently oversaw closer to $9 billion. The firm is known in the hedge-fund industry for its role in pushing for corporate changes at companies where it has held a significant ownership stake, including New York Times Co.
The lawsuit, in Delaware Chancery Court, stemmed from a 2006 battle between Nacco and Harbinger to buy Applica Inc., which marketed appliances licensed under the Black & Decker name. Nacco, which sells appliances under the Hamilton-Beach name, struck a deal to buy Applica, but eventually lost the target to a higher bid by Harbinger.
Nacco alleged that, while it was in confidential talks to buy Applica, the target company's executives were secretly helping Harbinger mount its rival bid. Among the allegations was that Applica executives passed tips on the Nacco negotiations to Harbinger through a consultant working for the hedge fund. The consultant later became a Harbinger employee.
Both the consultant and Harbinger strongly denied receiving any non-public information and denied any improper interference in Nacco's bid.
Harbinger amassed a 40% stake in Applica before Nacco's bid was announced, then used that advantage to win the takeover battle, the lawsuit alleged.
Write to Mark Maremont at mark.maremont@wsj.com
Tuesday, February 15, 2011
Harbinger Holdings, LLC, Managing Member
Harbinger Holdings, LLC, Managing Member
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 13F
Form 13F COVER PAGE
Report for the Calendar Year or Quarter Ended: December 31, 2010
-----------------
Check here if Amendment [ ]: Amendment Number:
-----------------------
This Amendment (Check only one): | | is a restatement
| | adds new holdings entries
Institutional Investment Manager Filing this Report:
Name: Harbinger Capital Partners Special Situations GP, LLC
Address: 450 Park Avenue, 30th Floor
New York, NY 10022
Form 13F File Number: 028-12357
-----------------------
The institutional investment manager filing this report and the person by whom
it is signed hereby represent that the person signing the report is authorized
to submit it, that all information contained herein is true, correct and
complete, and that it is understood that all required items, statements,
schedules, lists, and tables are considered integral parts of this form.
Person Signing this Report on Behalf of Reporting Manager:
By: Harbinger Holdings, LLC, Managing Member
Name: Philip Falcone
Title: Managing Member
Phone: 212-339-5888
Signature, Place and Date of Signing:
/s/ Philip Falcone New York, New York February 14, 2011
- ------------------------------- ----------------------- -----------------
[Signature] [City, State] [Date]
Report Type (Check only one):
| | 13F HOLDINGS REPORT. (Check here if all holdings of this reporting manager
are reported in this report.)
|X| 13F NOTICE. (Check here if no holdings reported are in this report, and all
holdings are reported by other reporting manager(s).)
| | 13F COMBINATION REPORT. (Check here if a portion of the holdings for this
reporting manager are reported in this report and a portion are reported by
other reporting manager(s).)
List of Other Included Managers:
Provide a numbered list of the name(s) and Form 13F file number(s) of all
institutional investment managers with respect to which this report is filed,
other than the manager filing this report.
No. Form 13F File Number Name
1 028-13483 Harbinger Holdings, LLC
http://secwatch.com/harbinger-capital-partners-special-situations-gp-llc/13fnt/initial-quarterly-form-13f-not/2011/2/14/7574985
http://secwatch.com/harbinger-capital-partners-special-situations-gp-llc/13fnt/initial-quarterly-form-13f-not/2011/2/14/7574985
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