Harbinger’s wireless bet rankles investors
Mon Aug 30, 2010
Philip Falcone likes hard-to-value private equity, but now it’s his entire fund, which could exacerbate losses
Most hedge funds chose not to put illiquid private equity
investments directly into their hedge funds after getting
burned on those investments during the financial crisis of
2008. Not so Philip Falcone, whose Harbinger Capital Partners
was forced at that time to put more than a third of its
portfolio into a side pocket that still has not been fully
And now Falcone has a huge private equity bet right in his
dwindling flagship hedge fund. About 98% of his $3.4 billion
flagship fund’s net asset value is in telecom,
telecom services and cellular telecom positions, the bulk of
which is private. The valuation of those positions is so
uncertain that Harbinger Capital Partners could be nursing
heavier losses than it is reporting, according to investors.
Through mid-August, the fund lost 13%, a number that could be
double that amount because of leverage, some fear.
The main worry...
ISSN: 2151-1845 / CDC10004H
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