Yesterday Bloomberg reported that Goldman Sachs had pulled its entire $120 million investment from Harbinger Capital’s flagship fund, citing two reasons: 1) the returns were poor and 2) Phil Falcone had “loaned” himself $113 from one of the firm’s smaller funds (at a time when redemptions were suspended) in order to pay personal taxes, which didn’t sit well with some people. Now, someone inside Harbinger is claiming that Goldman was totally cool with the fund’s performance and could care less about Falcone helping himself to a li’l cash. The real reason is that they’re just jealous.

According to a source there, the hedge fund manager believes that Goldman Sachs isn’t actually upset about the $113 million withdrawal for taxes, or even his returns, but is simply still miffed that he successfully poached hedge fund star Omar Asali last year. Mr. Asali had been the co-head of Goldman Sachs Hedge Fund Strategies, and is said to now be in charge of Harbinger’s global portfolio strategy and analytics, with risk management responsibilities, too.

Also said to be a factor in the decision was Goldman’s bitterness over Lisa Falcone stealing the lyrics to what was supposed to be the hit single on their debut album, “Everybody throw your hands in the air, ugly bitches too, we don’t care.” And in a similarly petty move, sources close to the situation are citing the reason for Blackstone’s Harbinger withdraw to be Steve Schwarzman’s envy over the Falcones having the most talented barnyard animal in Manhattan on staff, when he can’t even get his Doberman to dance.

Article courtesy of Dealbreaker

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John Paulson is racking up big gains in his Recovery Fund, the $2 billion vehicle that purchased the assets of the former IndyMac Bank. According to Paulson’s latest investor letter, the fund is up 17 percent for the quarter.

Here’s the returns in the firm’s other funds for Q1:

Credit Opportunities –  7.5 percent

Paulson Advantage – 0.8 percent

Merger Arb Fund – 4.4 percent

Article courtesy of Dealbreaker

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