Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Reuters – Hedge fund Harbinger Capital Partners said on Tuesday it had lost more than a quarter of its stake in sugar maker Tate & Lyle as it has been unable to reclaim them from collapsed bank Lehman Brothers.
Harbinger said 17.7 million shares — worth 80 million pounds ($131.4 million) at current prices — will not be recovered and further shares held by Lehman may also be lost.
Hartford Courant – Harbinger Capital Partners LLC says it has sold part of its 20 percent stake in The New York Times Co., but still considers the company a core holding.
The hedge fund said in a securities filing this week that it sold 5 million Times shares at $8.25 each. That leaves it with about 23.5 million shares, or a 16.4 percent stake in the company.
Fund spokesman Charles V. Zehren says the media company “is still a core holding, and the sale was done to take advantage of the strength in the market.”
MarketWatch – Harbinger Capital, a big hedge-fund firm run by Philip Falcone, is selling 20 million shares of power company Calpine Corp.
Harbinger Capital Partners Master Fund I Ltd. is selling the stock in a public secondary offering underwritten by Morgan Stanley, Calpine said in a statement late Tuesday.
Harbinger plans to grant Morgan Stanley the option to buy another three million Calpine shares. The power company said it won’t get any of the proceeds from the sale.
Seeking Alpha – In a 13D filing with the SEC, Harbinger Capital Partners has revealed a new position in Zapata Corporation due to activity on June 17th, 2009. This is a brand new position for the hedge fund and it now shows a 51.3% ownership stake with 9,888,684 shares.
As defined in the 13D, Harbinger has, "Acquired beneficial ownership as a result of receiving certain proxies to vote the Shares. Until the Closing (as defined in Item 6), the Funds will not acquire a pecuniary interest in any of the Shares."
Daily Territorial – A third offer to take copper miner Asarco out of Chapter 11 was filed last week in U.S. Bankruptcy Court in Corpus Christi, Texas, by New York City-based hedge-fund manager Harbinger Capital Partners.
The $500 million reorganization is competing for control of Asarco with plans offered by Sterlite Industries, based in Mumbai, India, and Asarco’s parent company, Grupo Mexico.
The plan from Harbinger Capital, one of Asarco’s largest bondholders, is less than half the other offers but the investment firm says its offer is better because the other two either lack sufficient support from creditors or won’t meet bankruptcy court standards.
PerthNow – Mr Geffen tried to acquire a 19 per cent stake in the New York Times Company that was held by Harbinger Capital Partners, the activist hedge fund, but was rebuffed, it emerged overnight.
Since 1896, the newspaper has been controlled by the Ochs-Sulzberger family, whose members maintain their grip with a separate class of super-voting shares.
However, the dominance of the family, headed by Arthur Sulzberger, has come under pressure as advertising has collapsed and losses have mounted, which have led to speculation that The New York Times may be sold.
Reuters – Media mogul David Geffen tried to buy a stake in the New York Times Co from hedge fund Harbinger Capital Partners, but was rejected, a source with knowledge of the matter said on Monday.
Geffen offered to buy the stake at market price, but Harbinger fund manager Phillip Falcone wanted him to pay a premium, according to the source.
Reuters – Hedge fund firm Harbinger Capital Partners LLC swung into the black with investors saying the flagship fund gained between 6 and 8 percent in the first quarter.
That is good news for the New York-based firm, run by Philip Falcone, and its clients after Harbinger Capital Partners Fund I lost roughly 28 percent last year.
Bloomberg – Philip Falcone, who runs the $7 billion Harbinger Capital Partners LLC, is starting a hedge fund that draws on his background in distressed securities, even as investors are locked into his biggest fund.
The Credit Distressed Blue Line Fund will buy troubled loans and bonds, and bet against higher-rated debt, the New York-based firm said in a March 16 letter to investors. The firm’s flagship $5 billion Harbinger Capital Partners Fund I limited withdrawals to 65 percent of its assets last year because of private-equity investments, which are harder to sell than publicly traded stocks.
West Palm Beach (HedgeCo.net) – Some analysts are saying that the mighty New York Times might be headed down the same path as the bankrupt Tribune Company, owner of the Chicago Tribune and Los Angeles Times.
Hedge fund shareholders, Harbinger Capital Partners Funds and Firebrand Partners own 19% of the NYT Company, and the outlook does not look good. NYT is approximately $1 billion in debt, the result of its move to a new building on Eighth Avenue a couple of years ago.
Harbinger Capital Partners has grown to one of the 15 largest hedge funds, by assets, in America. Firebrand Partners is an operational activist firm that invests in publicly-traded companies whose brand equity represents significant upside relative to their market capitalization.
The NYT Company includes The New York Times, the International Herald Tribune, The Boston Globe and 15 other daily newspapers.
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New York (HedgeCo.Net) – New York-based Harbinger Capital Partners has capped year-end withdrawals from its largest hedge fund after investors moved to pull $3.5 billion of capital. The hedge fund, run by Philip Falcone, will only honor 60 to 70 percent of the requests, according to a report by Bloomberg News.
The Harbinger Capital Partners Master Fund, which manages approximately $10 billion, has never posted a losing year since its launch in 2001. While 2007 saw returns of 115 percent, the fund has lost 23 percent through the end of November, according to the report which cited people familiar with the matter.
Harbinger is just one of dozens of hedge funds who has suspended redemptions this year amidst unfavorable market conditions. Large firms like RAB, Pardus and Citadel are just among a few who have halted withdrawals in hopes of waiting out the storm and avoiding a liquidity crunch.
Harbinger likes to invest in companies either going through mergers or in companies they feel they can strategically change for the better. The firm made headlines when they sought seats on both the New York Times and Media General; two companies in which they invest. They won their board seats after a much publicized proxy battle earlier this year.
Hedge funds as a whole have suffered this year, posting record losses. According to the Credit Suisse/Tremont Hedge Fund Index, hedge funds are down over 19 percent on the year through the end of November. It is estimated that the once $3 trillion industry will manage a mere $1 trillion at the start of the new year.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
