No 2
Phil Falcone
City: New York
Firm: Harbinger Capital Partners
Age: 45
Estimated Income:
$1.5–$2 billion
Falc one first landed on our radar screen during the run-up to the inaugural Trader Monthly 100. He landed a spot (at $30 million) on that first list, which was based on 2003 performance and was published in late 2004(and contained an overblown estimate for the income of an unrelated American Stock Exchange options trader named Larry Falcone).
Our estimate on “the other Falcone,” however, was spot-on. Phil Falcone, an unassuming former Harvard hockey player, Kidder Peabody junk-bond trader and Barclays Capital executive, returned for the second iteration of the Trader Monthly 100 (based on 2004 performance), logging a respectable $40–$50 million. Falcone made the next two lists as well, last year climbing multiple rungs to the $100–$150 million range.
Not surprisingly, he’s back again this year — and golly, has our boy grown up! In a similar fashion to John Paulson (if far less heralded), Falcone pummeled the subprime mortgage market in 2007. His Harbinger Capital Partners Offshore Fund was up 114 percent, in large part because of a spectacular play involving Australian iron-ore producer Fortescue Metals; that fund is now $15 billion. A second fund (a special-situations strategy now totaling $4 billion) also mined Fortescue; that fund returned 167 percent last year.
Harbinger charges a 1.5 percent management fee and takes 20 percent of the spoils, and Falcone does not have a huge staff. Harbinger’s assets totaled about $20 billion as of February. That’s where vertigo kicks in for us. Good thing Falcone has a reputation as being famously grounded. “Phil is the most down-to-earth guy you’ll ever meet,” says a friend. “He doesn’t care about money. I mean, he cares, but not like some guys.”
Whether he cares or not, Falcone owns one of most expensive homes in New York City. Apparently, he and his wife intend to transform their just-purchased $59 million Upper East Side townhouse (once owned by Penthouse publisher Bob Guccione) from lavish-chic to family friendly.
But as warm and cozy as he wants his dwelling to be, don’t think for a second that this market maven is a softie; Falcone is known to exhaustively pore over the details of an industry or company, find its weaknesses and move in for the kill. Arthur Sulzberger, take note: He recently decided to lock horns with the New York Times Company. Well, how’s this for a banner headline: