Falcone, Singer Headline SALT Day One

May 10 2012 | 12:03pm ET

One of the hedge fund industry's biggest annual conferences went off with a bang yesterday, as two of the business' biggest names took the stage.

Harbinger Capital Management's Philip Falcone and Elliott Associates' Paul Singer headlined the SALT Conference's first day at the Bellagio Hotel and Casino in Las Vegas, which also featured former Vice President Al Gore. But all eyes were on Falcone, who is struggling to save the wireless Internet venture that he has poured more than half of Harbingers' assets into.

Falcone only briefly—and obliquely—touched on his troubles with LightSquared, which is negotiating with creditors to avoid either a default declaration or a bankruptcy filing. The company was sent into a tailspin in February when the Federal Communications Commission withdrew a crucial waiver, citing concerns about interference with global positioning systems.

"The new wrench is the regulatory environment and that's a whole different dynamic that's almost unanalyzable," he said during a morning panel. "And personally, I'm going through an issue right now where because of a policy change, it creates investment issues."

Falcone made the remarks as part of a broader discussion of the increased—and, in his opinion, unwelcome—role of regulation in the markets. He also told the 2,100 attendees that he'd like to have a permanent capital vehicle, no surprise, given how redemptions have helped shrink Harbinger's assets under management to a fraction of their former level.

"Buying control of companies, buying 100% of companies, that's where I think a great opportunity is," he said. "If you have the right vehicle, it's a huge opportunity."

Falcone also faulted investors' insatiable appetite for liquidity, arguing that it keeps hedge funds from mining that opportunity.

"Most managers today are paying much more attention to liquidity and liquidity is really driving how people invest," he said. "People are passing up, I think, pretty solid opportunities that are relatively illiquid because of the uncertainty that the investor base brings to the situation for whatever reasons they're dealing with."

Why would a man facing huge problems with his hedge fund agree to speak at SALT? It seems Falcone had an experience common to industry players: gentle arm-twisting on the part of Anthony Scaramucci, head of SkyBridge Capital, which hosts the shindig.

Scaramucci said he ran into Falcone at a fundraiser and said, "You should get the opportunity to express yourself to your peers."

Also hitting the stage at SALT was Singer. Instead of using the forum to hammer away at his bête noir, President Barack Obama, Singer turned sage, imploring his listeners to get in touch with their "existential humility."

"One of the biggest enemies of our long-term portfolio performance is ourselves," he said, Zen-like.

"'What am I missing?' is a much more important question than 'How cool am I?'" Singer philosophized. He warned his colleagues against growing complacent or buying into their own hype, both of which are "absolute death."


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.