Summary
NEW YORK/BOSTON (Reuters) - Investing with hedge fund manager Philip Falcone, who oversees about $8 billion at his Harbinger Capital Partners, has required an awfully strong stomach or a fistful of Dramamine.
In 2007, Harbinger registered an astounding 116 percent gain, only to lose 22 percent as the financial crisis took hold the following year. In 2009, the New York-based fund was back in the green, posting a 46 percent return. And this year? Harbinger is sucking wind again, falling 14 percent through the middle of August.See the full content of this document
Extract
Phil Falcone's Riskiest Trade Ever?
But Harbinger's wealthy flock may need more than intestinal fortitude going forward. They must also have faith - and perhaps some suspension of disbelief - that Mr. Falcone's big and risky bet on wireless broadband technology will pay off.
Harbinger's two main investment funds are the owners of LightSquared, an upstart Reston, Virginia-based telecom company that plans to use two orbiting satellites to bring high-speed Internet service to some 260 million in the U.S. by 2015.Roughly $3 billion or 40 percent of Harbinger's assets are tied- up in LightSquared, say people familiar with the funds. Formerly known as SkyTerra Communications, the telecom company is the hedge fund's single largest and most concentrated bet. Mr. Falcone's wager on the future of satellites and mobile telecom is more daring than his highly profitable bet on the collapse of the U.S. subprime housing market in 2007, which made the 48-year-old...See the full content of this document
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