Harbinger-Owned Insurer Plans IPO, Payment To Falcone-Led Vehicle

Aug 30 2013 | 10:57am ET

Less than two weeks after accepting a five-year ban from the hedge fund industry, Harbinger Capital Management's Philip Falcone is demonstrating how he plans on spending his absence.

Falcone's Harbinger Group, a publicly-listed permanent capital vehicle he set up in 2010, announced that one of its portfolio companies would sell new shares to fund a dividend payment and expansion. In a preliminary prospectus filing, Baltimore-based insurer Fidelity & Guaranty Life said it would hold an initial public offering to raise about $100 million.

Harbinger Group is not selling any of its majority stake in the company, which it acquired in 2011. But Fidelity & Guarantee will be sending some of the proceeds to the company, anyway, in the form of a dividend. The rest will be used to "support the growth of our business and other general corporate purposes."

Falcone and Harbinger Capital earlier this month settled a variety of fraud allegations with the Securities and Exchange Commission. The two agreed to pay $18 million, and Falcone accepted the five-year ban—a ban that does not bar him from serving as a director of a public company and thus allows him to remain chairman and CEO of Harbinger Group.

Fidelity & Guaranty's IPO is several months away. Credit Suisse Group will serve as the underwriter.


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