Harbinger Capital

Last updated
Harbinger Capital Partners
Company type Private company
Industry Financials
Founded2001 [1] in Birmingham, Alabama by Harbert Management Corporation
Headquarters New York City, New York, USA
Key people
 Philip Falcone (Senior Managing Director)
AUM $336 million [2]
Website www.harbingercapital.com

Harbinger Capital Partners is a private hedge fund based in New York City, New York, founded by Philip Falcone. Harbinger is a highly diversified multi-strategy hedge fund. [3] Notable investments have included sub-prime mortgages in the United States and the United Kingdom, such as HBOS, [1] [4] and LightSquared, a wireless communications company that filed bankruptcy in 2012. [5] [6]

Contents

History

Harbinger was founded in 2001 [7] by Philip Falcone and Harbert Management Corporation, a Birmingham, Alabama-based investment company that provided much of the original funding. Harbinger had funds under management of $26.5 billion (£13.4 billion) as of the end of June 2008. [8] [9] In 2009, Harbinger acquired the ownership of its funds from Harbert. Also in 2009, Harbinger acquired controlling stock of the Zapata Corporation from the Glazer family and changed its name to The Harbinger Group Inc. (NYSE: HRG). [10] The hedge fund is based in New York, New York. [7] The firm's hedge funds include the Harbinger Capital Partners Master Fund, the Credit Distressed BlueLine Fund, and Harbinger Capital Partners Special Situations Fund. [11]

Harbinger has owned large stakes in The New York Times Company, Cleveland-Cliffs, and 28% stock ownership of satellite communications company Inmarsat. The company has also owned stakes in rival satellite operators SkyTerra and Terrestar, and British sugar producer Tate & Lyle. [9] The company was ranked on the Wall Street Journal's "The Hedge Fund 100" list in 2008 and 2009. [12] [13] According to press accounts the assets under management at Harbinger peaked at $26 billion in 2008 and had declined to approximately $9 billion as of 2010 due to sizeable investor redemptions with approximately 40% of that total (approximately $3.5 billion) concentrated in investments related to building a high-speed wireless network in the United States. [14]

Harbinger Capital, which owned Russell Hobbs, merged it with Spectrum Brands on June 16, 2010 for $661 million and now controls approximately 64% of the appliance maker, Spectrum. [15]

In November 2014, Falcone announced his resignation as chief executive and chairman from Harbinger Group HRG, whose second-biggest shareholder is Harbinger Capital. Falcone was paid a lump sum of $40.3 million upon his resignation. [16] [17]

In March 2015, the lawsuit accusing Falcone and Harbinger Capital Partners of "misleading investors about the firm's stake in LightSquared Inc." was dismissed. [18] That same month, a judge approved Harbinger Capital's restructuring plan of LightSquared, which paid off lender Charlie Ergen, and put LightSquared in the hands of investors, including JP Morgan Chase. As part of the deal, Harbinger maintained 44% equity, but Falcone would no longer be involved in day-to-day operations.[ citation needed ]

As of 2015, the top equity holdings of the firm were in the shares of the following companies: Spectrum Brands Inc, Harbinger Group Inc, North American Energy Partners Inc, and EXCO Resources Inc. [2]

In December 2017, Harbinger Capital Partners filed a lawsuit against Apollo Global Management, alleging fraud over "pouring" "$2 billion into the ill-fated wireless venture formerly known as LightSquared Inc." [19]

SEC settlement

In August 2013, the firm reached a settlement with the SEC agreeing to pay more than $18 million and admit wrongdoing. As part of the settlement, Harbinger Senior Managing Director Philip Falcone was also barred from the securities industry for at least five years, but it did not prohibit him from working as an officer or director of a public company. [20] Among the SEC's multiple allegations were that Falcone misused fund assets and diverted fund assets for personal use, that the fund engaged in redemption and other practices that favored certain investors over others, and that fund attempted to conduct an improper short squeeze on the bonds of Canadian manufacturing firm, partially in retaliation against a competitor investment firm. Harbinger and Falcone largely admitted to these allegations in the settlement. [21]

July 4, 2014, the U.S. Security and Exchange Commission's Office of the Whistleblower issued a "Final Order" in matter number 2012 -81 [22] ruling that rejected a claim made by an individual requesting a reward for assisting in the investigation. The SEC rejected the claim, asserting in the "Claimant did not provide information that led to the successful enforcement" and denying the application. [23]

See also

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References

  1. 1 2 Foley, Stephen (14 November 2008). "Hands up if you made billions of dollars out of the credit crisis". The Independent. Retrieved 6 August 2014.
  2. 1 2 "How to Lose $2 Billion in 10 Years: Unpaid Bills Pile Up for Former Hedge-Fund Star". The Wall Street Journal. Retrieved 9 December 2021.
  3. ↑ HERBST-BAYLISS, SVEA (13 November 2008). "Falcone makes big bet on food products". Reuters. Retrieved 10 April 2015.
  4. ↑ Burton, Katherine. "JPMorgan, Renaissance Trail Hedge-Fund Gains in 2007". Bloomberg L.P. Retrieved 6 August 2014.
  5. ↑ "Our Investor". Lightsquared. Retrieved 6 August 2014.
  6. ↑ Scurria, Andrew (26 December 2017). "Harbinger Capital Sues Apollo Global Management Over LightSquared Losses". Wall Street Journal. Retrieved 2019-10-03.
  7. 1 2 "Company Overview of Harbinger Capital Partners LLC". Bloomberg L.P. Retrieved 9 April 2015.
  8. ↑ "Harbinger Capital Imposes Limits on Withdrawals". Financial Times. January 11, 2009. Retrieved 6 August 2014.
  9. 1 2 Costello, Miles (2008-07-08). "Inmarsat soars as Harbinger Capital considers bid". Archived from the original on 2011-06-12.
  10. ↑ Weiss, Miles (June 29, 2009). "Manchester United Owner Glazer Turns to Falcone". Bloomberg L.P. Retrieved 6 August 2014.
  11. ↑ "Harbinger Capital Partners". Hedge Tracker. Retrieved 6 August 2014.
  12. ↑ "The Hedge Fund 100" (PDF). Wall Street Journal. Retrieved 10 April 2015.
  13. ↑ "Top 100 Hedge Funds" (PDF). Wall Street Journal. Retrieved 10 April 2015.
  14. ↑ "Lisa Falcone: Who You Calling 'Wife of'?". Business Week. September 16, 2010. Archived from the original on September 19, 2010. Retrieved 6 August 2014.
  15. ↑ Newman, Judy (11 June 2010). "Shareholders of Spectrum Brands approve merger with Russell Hobbs". madison.com. Retrieved 2019-10-03.
  16. ↑ Vardi, Nathan (25 November 2014). "Phil Falcone Resigns From Harbinger Group, Collects $40.3 Million". Forbes. Retrieved 9 April 2015.
  17. ↑ Goldstein, Matthew (25 November 2014). "Philip Falcone, Hedge Fund Chief in Exile, Is Stepping Down". New York Times. Retrieved 10 April 2015.
  18. ↑ Van Voris, Bob. "Harbinger Investor Suit Over Lightsquared Dismissed by Judge". No. 30 March 2015. Bloomberg Business. Retrieved 9 April 2015.
  19. ↑ Scurria, Andrew. "Harbinger Capital Sues Apollo Global Management Over LightSquared Losses". The Wall Street Journal . Retrieved December 31, 2017.
  20. ↑ Chung, Juliet; Checkler, Joseph (25 November 2014). "Falcone to Depart Harbinger Group, Focus on Separate Company". Wall Street Journal. Retrieved 10 April 2015.
  21. ↑ "Philip Falcone and Harbinger Capital Agree to Settlement". Securities & Exchange Commission. Retrieved 6 August 2014.
  22. ↑ "Order Administering Cease-and-Desist Proceedings - Harbinger Capital Partners, LLC" (PDF). Securities & Exchange Commission. Retrieved 6 August 2014.
  23. ↑ "In the Matter of Harbinger Capital Partners, LLC, File No. 3-14928 PRELIMINARY DETERMINATION OF THE CLAIMS REVIEW STAFF" (PDF). Securities & Exchange Commission. Retrieved 6 August 2014.
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