Harbinger Capital Partners’ heavy July losses have carried on into August, with the aggressive New York hedge fund - run by superstar Phil Falcone - having given back almost two-thirds of the profit it made this year in just six weeks.
A letter to investors this week showed that by August 15 the offshore version of the $20bn+ fund had lost 5.8 per cent in the month, adding to losses of 15.5 per cent in July. According to investors, the fund was hard-hit by the sudden reverse of the long energy, short financials trade, one of the most popular hedge fund bets.
Harbinger, which successfully took on the New York Times, is pushing for change at iron ore producer Cleveland-Cliffs and wants to buy satellite group Inmarsat, is still up 14 per cent this year, a number most hedge fund managers would be delighted to report. But at the end of June it was up almost 40 per cent, more in line with last year’s eye-watering 116 per cent return, earned in large part through prescient bets against subprime mortgage securities.
