Harbinger Gains Disappear In Third Quarter

Oct 13 2008 | 10:04am ET

Activism giveth, and wild market turmoil taketh away.

Harbinger Capital Partners, which was up almost 43% at the end of the first half, has given back all of its gains and more. The firm’s $14 billion flagship fell another 17.9% last month—one of the worst months in the history of the hedge fund industry—and is now down 5.4% on the year.

And the bad news may not be over for the $21 billion firm: Investors say there will be further losses from Harbinger’s exposure to Lehman Brothers, which has already cost it $600 million, the Financial Times reports.

But Harbinger chief Phillip Falcone, who made his name with a big, successful subprime mortgage bet last year and with his successful battle for board representation at The New York Times Co., has more than just Wall Street’s woes to blame for his fund’s poor performance. The firm recently lost its activist battle with mining concern Cleveland-Cliffs, where it had sought changes to its shareholder rules.

Meanwhile, Harbinger says it is taking steps to foster a turnaround, including a reduction in the amount of leverage it uses.


In Depth

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note