Tuesday, 30 September 2014
Last updated 5 hours ago
Dec 1 2010 | 10:17am ET
Unlikely to get a new loan from his own hedge fund anytime soon, and burned by redemptions stemming in part from the one he did get, Harbinger Capital Partners' Philip Falcone has hit upon new ways to raise money, for both business and pleasure.
On the business front, Falcone's Harbinger Group raised $350 million earlier this month in a bond sale. The Harbinger Group shell company was created last year when three Harbinger hedge funds bought a majority stake in an inactive oil drilling company Zapata.
Falcone plans to use the proceeds from the debt sale to fund long-term investments in agriculture, telecommunications and other sectors.
The five-year, 10.625% coupon bonds are backed by the Harbinger funds' stake in Spectrum Brands, which is now owned primarily by Harbinger Group. In exchange, the Harbinger hedge funds have received additional Harbinger Group stock.
The New York-based hedge fund denied that the shell company deal had anything to do with investor redemptions, sparked both by $113 million loan Falcone took from the hedge fund to pay a tax bill and by investor concerns over the $9 billion firm's huge investments in illiquid wireless and telecommunications companies.
"Harbinger Group Inc. was not acquired to be a mechanism to deal with Harbinger Capital fund redemptions," a Harbinger spokesman told Bloomberg News. "Rather, HGI is a permanent capital vehicle to house longer-term controlling equity stakes in companies that operate across a diversified set of industries."
Falcone has denied that Harbinger will have trouble meeting the redemption requests.
Meanwhile, Falcone and his wife have found a new lender following the uproar over his loan from Harbinger. The two have borrowed an unspecified amount from Bank of America. The Falcones put up a chunk of their impressive art collection, blandly described as "certain items of fine art" in a regulatory filing, as collateral.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
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