(Reuters)
Talk about one hand washing the other.
Beleaguered hedge fund honcho Phil Falcone’s big bet on his own publicly traded entity, Harbinger Group, is helping to lift his troubled hedge fund, Harbinger Capital Management, out of the deep end.
Falcone’s flagship fund posted returns of 10.6 percent in July and a whopping 28 percent gain in June, The Post has learned.
The $3 billion hedge fund is still in the red for the year, down 5.8 percent. But the recent gains offer a small ray of hope in an otherwise dark period for the fallen hedge-fund heavyweight.
In May, Falcone’s startup wireless venture, LightSquared, filed for bankruptcy after regulators threatened to pull the plug on its operating licenses. Writedowns in LightSquared resulted in losses of 47 percent in the hedge fund last year.
In June, Falcone was slapped with civil-fraud charges by the Securities and Exchange Commission for borrowing $113 million from a fund that he had recently barred investors from tapping.
He is fighting the allegations.
Driving the summer pop is Falcone’s $1 billion stake in his mini-conglomerate Harbinger Group, which trades on the New York Stock Exchange.
Harbinger Group is a holding company that owns a consumer-products company, a direct lender and a life-insurance company. Falcone, 50, is the chairman and CEO — as well as the majority owner, with a whopping 83-percent stake.
A spokesman for the fund declined to comment.
Harbinger Group’s shares started spiking in June, more than doubling in price from $4.72 on June 1 to a high of $10.81 recently.
The uptick came amid a positive report from EVA Dimensions, a firm that rates stocks based on a quantitative formula. EVA, the only research firm that currently covers Harbinger Group, rated the stock a “buy” in May before lowering to an “overweight” rating on Monday.
Harbinger shares closed yesterday up 1.4 percent to $8.85.