Fallout Between Harbinger And Early Backer Harbert?

Tyler Durden's picture

Hedge Fund Alert reports today that Harbinger Capital is trying to buy out its early backer, Alabama-based Harbert Management. The split comes at an odd time, but the decline in Harbinger assets under management, which went from $26 billion in 2008 to only $9 billion currently may have something to do with it: the flagship fund has fallen 27.8% while the Special Opportunities Fund has plummeted 56.1%, excluding redemptions. Nonetheless, Harbinger did well for Harbert over the years with no losing years since inception, and in fact returned 116.1% in the flagship fund and 170.4% in the Spec Ops Fund in 2007.

Harbert had provided $25 million in seed funding when Harbinger launched in 2001, and after a "mutual" decision, Phil Falcone is now in the process of repurchasing the seed stake for an undisclosed sum. Post the deal, Falcone will own 100% of the fund. Harbert will maintain current investments with the various Harbinger funds: Harbinger Capital Partners Fund 1, Harbinger Capital Partners Special Situations Fund and the offshore versions of these. Harbinger will continue to rely on Harbert for operational support. In the meantime, Harbinger which has invested lots of money in such recent flops as New York Times (20% stake) and Cleveland Cliffs (10%), is probably looking at more pain going forward.

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ng2amarinefunk's picture
ng2amarinefunk (not verified) Aug 20, 2009 7:03 PM

not quite, Harbinger 'owns' Calpine, when the time is right that company which has about 20 gigawatts on-line of combined cycle natural gas electric generation will become EXTREMELY valuable...

for you see, all this talk about local generation of electricity, of solar, of wind, and whatever - all this 'intermittent' power available is at the WRONG TIME, wrong place even 'available' -

thats where 'peaking power' generation, rather than base-load comes in - CALPINE has it, 100% peaking power capability -

it was CALPINE by the way whose power was sold to California 2000-2001 by ENRON power brokers, for JUST THAT REASON, 'peaking-power'  - 

the GRID becomes inherently unstable at about 10% non-standard sources such as wind and solar....

and AND despite Obamas advisors, better networking of THE GRID with more long distance power interchanges, and 'smart load control' at the home/consumer - thats all bullshit PERIOD,

nothing can replace actual LOCAL plant-already-in-place 'peaking power' right now CALPINE is ACTING as if a base load provider - no

so Falcone knows what he is doing, hence the limitations he placed on cash-ins earlier this year - HE is right one, regards the CALPINE component -

there is only ONE item to overcome, is the CALPINE holdings of that Mill Valley, Marin County, California Hedge (whats its name...has some interesting names on the individual investors list too!) THEN 51% control, and a totally new Board of Directors at CALPINE....soon i think