Harbinger Capital Partners, an investment company identified by the developers of the Ho Tram Strip gaming resort in Vietnam as one of its financial backers, is currently experiencing some turbulence in the New York markets.
The Wall Street Journal reported yesterday that Goldman Sachs Group and Blackstone Group have given notice of withdrawal of money they invested in the hedge fund vehicle of Harbinger, which is run by Phil Falcone. Bloomberg News reported that Goldman Sachs has USD120 million with Harbinger’s hedge fund.
Giving notice of withdrawal doesn’t mean the two institutions will actually take their money out. But it does indicate they are keeping their options open. The WSJ said, quoting a person familiar with the matter, that Harbinger once managed USD26 billion after betting successfully against sub prime mortgages in 2007, but that the capital under management is now down to USD9 billion. Bloomberg stated the hedge fund had seen capital losses of 15% through to 15th October, though a Harbinger credit fund is reported separately to be 10% up for the year.
Bloomberg reported that 90% of Harbinger’s capital is tied up in as-yet-unbuilt next generation wireless communication technology. That leaves around USD900 million for other investments, including Ho Tram.
Ho Tram is supposed to be a USD4.2 billion project (though few outside Vietnam seem to believe that this is what will actually go in the ground). There is no suggestion that Harbinger is the principal backer of Ho Tram, but it’s the only one named publicly by the Ho Tram developer—Asian Coast Development Ltd—so far. Even if Vietnam banks were to put in USD2.1 billion, that’s still a lot of capital to raise via some kind of syndicated debt facility or by issuing stock or a combination of the two. Even Las Vegas Sands Corp took some time to raise USD1.75 billion syndicated debt towards the cost of Cotai 5 and 6 in the red hot Macau market.