Harbinger Sells Permanent Capital Shares To Pay Redemptions

Sep 30 2013 | 2:40pm ET

Harbinger Capital Management has sold more than 20 million shares of its permanent capital vehicle to meet redemptions mandated by the hedge fund's deal with the Securities and Exchange Commission.

Harbinger hedge funds sold $158 million worth of Harbinger Group shares to Leucadia National Corp., making that firm the listed vehicle's second-largest shareholder with a 13% stake. Harbinger also sold a further 5.1 million shares to other investors, according to a regulatory filing.

Harbinger sold the shares to Leucadia for $8.50 each, below the $10.06 they closed at on Friday.

Harbinger and founder Philip Falcone agreed to pay out redemptions to Harbinger clients—the hedge fund suspended redemptions several years ago—as part of a settlement with the SEC that includes an $18 million fine and a five-year ban from managing outside capital. The deal allows Falcone to continue running Harbinger Group, which he set up in 2010.


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