Billionaire Phil Falcone has seen much, much better days.According to Reuters’ Katya Wachtel and Svea Herbst-Bayliss, Harbinger Capital Partners Fund II, L.P. dropped 16.76% in September. At the same time, his Harbinger Capital Partners Special Situations Fund, L.P. fell 9.65%.
This comes as a surprise to many observers because Harbinger was actually up 5% in August when a lot of hedge funds were doing badly.
Now the fund is down 12% YTD.
Investors, who spoke on the condition of anonymity, blamed the losses on Falcone’s difficulties with LightSquared. It’s a telecom company in which he has invested heavily and is facing opposition from regulators and Republican politicians.
LightSquared’s mission is to provide internet access to rural areas. Sounds great, but regulators claim that the new company could interfere with GPS systems and confuse aircraft and other transportation. That argument aside, some of the politicians opposed to the company get hefty donations from LightSquared’s potential competitors — like AT&T.
And it’s also worth noting that LightSquared has received the backing of the Obama administration—perhaps the biggest reason why conservative conspiracy theorists are positing that their billionaire public enemy #1 George Soros could be involved with the company as well.
So far in 2011, Harbinger has spent $1.6 billion lobbying for LightSquared.