Leucadia Doubles Harbinger Group Investment

Mar 20 2014 | 10:59am ET

Leucadia National Corp. has doubled its stake in Philip Falcone’s permanent capital vehicle after earning a 54% return on its first investment in the company.

Leucadia first invested in Harbinger Group in September, and has seen the value of its stake soar by more than half since then. The firm will now pay a further $253 million for 23 million preferred securities from Harbinger Capital Partners. Those convertibles can then be exchanged for Harbinger Group shares, pending regulatory approval, which will give Leucadia a 20% interest in the holding company.

As part of the deal, Leucadia will get two seats on Harbinger Group’s board. They are expected to go to Joseph Steinberg and Andrew Whittaker, who led the initial deal with Philip Falcone’s company.

Falcone last year agreed to be banned from the hedge-fund industry for five years in a deal with the Securities and Exchange Commission. The $18 million settlement did not, however, bar him from continuing to run Harbinger Group.

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