Harbinger Capital Partners filed to take one of its insurance businesses public on Thursday, just more than a week after the hedge fund agreed to a tougher compromise with the Securities and Exchange Commission over accusations of market manipulation.
The Harbinger unit, Fidelity and Guaranty Life, disclosed in a prospectus that it is seeking to raise $100 million in its initial public offering, a preliminary figure meant to calculate registration fees. No other details, including a potential selling price per share, were disclosed.
The firm, based in Baltimore, sells fixed annuities and life insurance products.
The insurer has posted steady growth over the last two years: It reported $344.1 million in net income last year, nearly double what it earned in 2011, atop $1.2 billion in revenue. For the nine months ended June 30, Fidelity and Guaranty reported $237 million in profit, more than twice what it reported in the period a year earlier.
According to the prospectus, Fidelity and Guaranty will use some of the proceeds from its offering to pay a dividend to Harbinger, as well as to finance corporate growth. The hedge fund is not expected to sell any of its shares.
Credit Suisse will lead the offering.
The unit’s controlling shareholders are affiliates of the hedge fund owned by the investor Philip A. Falcone. On Aug. 19, Mr. Falcone agreed to a landmark settlement with the S.E.C.
As part of the $18 million settlement, Mr. Falcone agreed to admit wrongdoing related to market manipulation accusations. In addition to paying the fine, Mr. Falcone agreed to be barred from the securities industry for up to five years.
While Mr. Falcone is not allowed to raise any new capital for his own hedge fund, he will be able to continue to act as an officer of a public company.
Harbinger has faced regulatory scrutiny in the insurance business as well. It, along with other investment firms like Apollo Global Management and Guggenheim Partners, have received requests for information from Benjamin Lawsky, New York State’s superintendent of financial services. Mr. Lawsky has professed concern about Wall Street firms owning life insurers and whether they are looking out for the long-term interests of policyholders.
