We found out yesterday that Harbinger’s head of investments, Lawrence Clark, was leaving Phil Falcone’s hedge fund.
Now it seems his exit is part of a larger story of departing staffers – some by choice, but others by force, according to Reuters.
With funds down to $7 billion (from a $26 billion peak), and the firm seemingly facing a different hurdle each week, it’s not a huge shock there have been several high-profile departures.
Here are the other three that are bolting:
- Kenneth Turano, a 29-year-old trader, left voluntarily. He’s described as being close to Lawrence Clark, and will be joining his new fund. He came to Harbinger ’05 and played on Harvard’s hockey team, where Falcone a star player 20 years prior.
- Clark Baker, a 49-year-old analyst, helped Falcone manage his bet on the implosion of the subprime housing market – a wager that turned his boss into an overnight billionaire with 116% returns the year Lehman collapsed.
- Eli Benson, a 36-year-old analyst who specialised in distressed debt, was with the firm from 2005.
So, will this exodus be a blow to Harbinger?
One investor told Reuters, “Falcone was losing a lot of research firepower with the departures of Clark, Baker and Benson.”
But maybe it doesn’t need that firepower.
With Harbinger paring down investments in commodities and retail as it funnels 40% its assets into longer-term bets in the satellite and wireless communications realm, it makes sense that the firm’s demand for the kind of analysis brought by Clark, Baker and Benson would be significantly diminished. So maybe they were shown the door.
Don’t feel too bad for these guys though.
While other hedge funders are making up any losses suffered through the financial crisis, these have not been mellow times for Harbinger; AUM nosedived; investors have fled; and the SEC has been poking around the firm too in connection to allegations of preferential treatment for some clients, and for Falcone himself.
Things could get worse, and who wants to be around for that.