A leading activist hedge fund is limiting withdrawals after investors sought to pull more than one-third of its assets at the end of the year.

Harbinger Capital Partners said investors will only receive 60% to 70% of their $3.5 billion in redemption requests from its flagship. The Harbinger Capital Partners Master Fund manages roughly $10 billion, and is down about 23% this year.

The losses at Harbinger are a severe reversal for the firm, which enjoyed several activist successes in the first half of the year, ending June up 43% in the first six months of 2008. Harbinger, which was founded in 2001, has never posted a losing year.