Phil Falcone’s Harbinger has had $1 billion in redemption requests.
Even though there’s a chance investors may cancel their redemption request, and they “must wait a year to take back their money in full,” the WSJ reports, this is bad news for Falcone.
Last year, huge investors including Goldman and Blackstone pulled out.
The firm is also dealing with investigations by regulators over potential market manipulation, lawsuits from angry investors, and after borrowing millions from his fund, reputational and trust issues on the Street.
Besides all that, there’s another reason investors want out: Falcone’s terrestrial wireless network project, LighSquared, is still worrying investors.
And ironically, redemptions “will be paid out part in cash and part in the form of an investment in LightSquared,” Falcone told investors according to the WSJ.
As for the flagship’s performance — up 2.17% — it actually hasn’t been too bad. (Although if a fund isn’t making at least 10%, it can’t be considered good performance.)
While it’s trailing the S&P so far in 2011, it has actually outperformed other hedge funds according to an index maintained by Hedge Fund Research.
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