December 13, 2010 / 6:51 PM / 8 years ago

Exclusive: Harbert backs new credit manager after Falcone

NEW YORK (Reuters) - Harbert Management Corp, the Alabama-based asset manager that helped launch the career of billionaire hedge fund manager Philip Falcone, is pinning its hopes on a new distressed trader, according to two people familiar with the matter.

The firm, with $2.7 billion under management, is tapping former Oppenheimer & Co. trader Greg Jordan to run its Harbert Credit Opportunities Fund, which plans to open for business on February 1, these people said.

The move is a reentry into distressed credit for Harbert, which began pulling some its investment from Falcone’s $7 billion Harbinger Capital Partners last year, despite being the earliest backer of the fund.

Jordan, who has more than 10 years of experience as a portfolio manager in leveraged loans, distressed credits and special situations, most recently worked at Oppenheimer (OPY.N) as a portfolio manager since early 2009.

Before that, he ran a proprietary leveraged credit trading portfolio at Bank of Tokyo’s Union Bank where he made some strong short bets during 2008 that helped the bank ride out the credit crisis.

Birmingham, Alabama-based Harbert decided late last year that it would like to continue investing in the long-short credit space, these people said.

Jordan has been a long-time investor in distressed, mid-sized companies which Harbert expects could generate opportunities in the next few years, these people said.

Harbert declined to comment and wouldn’t specify how big the fund would be, but one of the people familiar with the matter said the investment was “meaningful” and that the fund would be able to add investments from U.S. and offshore investors to raise more capital.

Harbert, which initially invested $25 million with Falcone to back his fund’s launch in 2001, started under a similar structure as Jordan’s fund, these people said. Harbinger was known as the Harbert Distressed Investment Master Fund before it changed its name to Harbinger in 2006.

Falcone’s fund, which managed about $26.5 billion at its peak in 2008 after delivering a 116 percent return that year, is still one of the world’s largest hedge funds.

But several big investors, in addition to Harbert, have begun to pull their investments from Harbinger, whose flagship fund fell 22 percent last year and is down another 13 percent so far this year after a risky bet on a telecom network, according to investors in the fund.

Harbert still has some money with Falcone and the split between the firm and its star manager has been described as “amicable.” Harbert also runs three other hedge funds, focusing on emerging market, value and merger arbitrage or event-driven trading strategies.

Reporting by Emily Chasan. Editing by Robert MacMillan

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