Paulson and Co

  • Hedge Funds

    So Long As John Paulson Doesn’t Work Up The Nerve To Send That Redemption Letter To A Certain Hedge Fund Located At 1251 Avenue of the Americas, New York, NY, 10020, Paulson & Co. Will Be Around For Years To Come

    Was 2011 a very kind year to John Paulson? No, it was not. Is 2012 shaping up to be any different? Not really, no. His proclamation that last year’s losses were but an “aberration” has not exactly been backed by the fact that AP was down 16 percent through June, Morgan Stanley’s prime brokerage put Paulson and Co. on a list of firms it warns clients not to invest with, and a few clients have not only quit the fund but told anybody who will listen that leaving was one of the best decisions they’ve ever made. Also not great is the fact that assets under management have declined 44.9 percent to $17 billion from $38.1 billion, due to a combination of unfortunate performance and redemptions. Happily, though, there is a silver lining that perhaps few people have thought of, namely that John Paulson’s got mucho of his own dinero in the firm and he hasn’t given up on the place yet.

    …the firm has a saving grace: About 60%, or $12.6 billion of June 30 assets are from employees. Observers said it is impossible to know how much of that employee asset pool belongs to John Paulson, the firm’s founder and president, but they speculate it is the vast majority. (By contrast, about 31% or 32% of Paulson & Co.’s assets are from institutional investors.) One source said the hedge fund manager’s size at its peak — before the performance decline — combined with the high percentage of employee capital have insulated Paulson from the crippling impacts that performance declines of this size and client redemptions would wreak on other firms.

    “It’s impossible for any other hedge fund firm to lose $17 billion and still be in business,” said the source, who asked for anonymity. “The firm will not fall apart because of this. Just John (Paulson’s) money alone is enough to keep the firm in business. But he is not going anywhere. There are absolutely no signs that John Paulson intends to do anything other than manage his way out of this.”

    This scenario would also have to assume that the firm stops losing money but regardless, suck on the above, New Mexico.

    Paulson Tries To Bounce Back [P&I via Dealbook]

    / Jul 23, 2012 at 3:56 PM
  • Hedge Funds

    Former Paulson Protégé In A Charitable Places About Losses

    Remember Paolo Pellegrini? For those who need a refresher, the Italian Stallion is the former Paulson and Co. employee who helped John come up with a highly lucrative subprime trade, later leaving the firm to set up his own shop (the delightfully named PSQR AKA Pellegrini Squared) after some reported friction re: whether or not […]

    / Jul 11, 2012 at 11:47 AM
  • Hedge Funds

    Paulson And Co Not Shedding Any Tears Over Investors Who Don’t Know What’s Good For Them

    “We know that about investing with John Paulson. He makes macroeconomic calls,” says Joelle Mevi, the chief investment officer of the New Mexico PERA [which piled into the fund after 2007 and has since  liquidated its holdings]. But “we started to notice a consistent underperformance of the fund, and we were noticing a bit of […]

    / Jun 29, 2012 at 11:55 AM
  • Hedge Funds

    Former Paulson LP Pleased To See Her Ex Hasn’t Changed His Deadbeat Ways, Not That She Actively Looks In On Him And Would Take Him Back In A Heartbeat Or Anything

    As you may or may not have heard, the last 18 months have not been the best of times for John Alfred Paulson. His Advantage Plus fund was down fifty percent last year, he got screwed big time by a bunch of fake trees, his proclamation that 2011’s losses were but an “aberration” has not exactly been helped by the fact that AP was down 10 percent through May 2012, Morgan Stanley’s prime brokerage put Paulson and Co. on a list of firms it warns clients not to invest with, some investors ” have expressed their growing unease,” and others have called it quits. But! JP can take solace in knowing that at least one LP, and probably more, are so not over him.

    New Mexico, which stuck by Paulson through last year’s growing losses, pulled its $40 million investment in the first quarter. “From time to time, I do check on John Paulson to see whether we did the right thing,” said Joelle Mevi, the state’s chief investment officer. “And I see that we did.”

    No word on whether or not New Mexico downs two bottles of wine and then logs onto Facebook to stalk Paulson’s page and mutters “skank” under her breath when she sees JP with more attractive LPs but it seems prett-ay obvious.

    John Paulson’s Returns Falter Again; Investors Fret [Reuters]

    / Jun 28, 2012 at 2:21 PM
  • Hedge Funds

    Dear Paulson Investors

    Paulson, the billionaire hedge-fund manager seeking to reverse record losses in 2011, posted a 13 percent decline last month in his gold fund as bullion and mining stocks fell, a person briefed on the returns said today. The loss leaves the $1.2 billion fund, which can buy derivatives and other gold- related investments, down 23 […]

    / Jun 6, 2012 at 3:22 PM
  • Hedge Funds

    Paulson And Co To Provide Monthly ‘My Bad’

    Which is pretty nice of him.

    John Paulson, the billionaire hedge- fund manager seeking to reverse record losses in 2011, lost 6.7 percent last month in one of his largest funds as gold-mining stocks dropped, said two people briefed on the returns. The decline leaves Advantage Plus, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, down 8.8 percent this year, said the people…Paulson & Co. will now send a “brief commentary” along with its monthly performance estimates to investors, Paulson said in the letter. He is seeking to reverse 2011 losses from an ill-timed bet on an economic recovery, which caused him to scale back risk before stock markets started to rally late in the year. About 20 percent of Paulson’s investor base is currently underwater on the fund holdings, one of the people said.

    Paulson Hedge Fund Said to Extend Slump With April Loss [Bloomberg]

    / May 8, 2012 at 4:52 PM
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    News

    When Lucky Brass Balls Fail

    “Of the top 25 earners of 2010, 15 did not make this year’s list [of highest paid hedge fund managers]. Among them: Appaloosa’s David Tepper, whose Palomino fund fell 3.33 percent, and Edward Lampert of ESL Partners, which plunged 12 percent on big losses from Sears Holdings. Mr. Tepper did not respond to requests for […]

    / Mar 30, 2012 at 2:37 PM
  • johnpaulsonposing

    Hedge Funds

    Bonus Watch ’13: Paulson And Co.

    The bad news: even if Paulson and Co. turns things around in 2012, they might not get to collect performance fees, on account of being under water due to last year’s annus fucking horribilis. The good news: John Paulson’s employee will still get paid, because that’s just the kind of guy he is.

    Paulson’s flagship fund, Advantage Plus, fell a whopping 53 percent last year – prompting an apology to investors and a media drubbing. The decline also meant that it could be years before Advantage Plus and other fallen Paulson funds are able to return to their high-water mark, or the returns level at which John Paulson and his colleagues can begin to collect a significant percentage of their annual gains as performance fees.

    In an acknowledgement of that problem, Paulson recently told some employees he would reset the firm’s internal high-water mark to zero as of Jan. 1, said the person familiar with the matter, effectively meaning that if the company’s funds are in the black for 2012, those employees can collect bonuses pegged to this year’s returns and not be dragged down by last year’s losses. Paulson will pay for those bonuses himself, this person added.

    John Paulson Lowers the Bar to Pay Employees [CNBC]
    Related: John Paulson: I’ll Get The Losses This Year, Next Year We Go Dutch?

    / Mar 27, 2012 at 4:24 PM
  • News

    You Better Hope You Hear John Paulson Loud And Clear

    When you’re hedge fund manager who not too long go scored returns of 590 percent and a personal payday of $3.5 billion in a single year, losing 50 percent while being forced to live off management fees can take a toll on the ego. You start questioning every move. You become plagued by self-doubt. You […]

    / Feb 8, 2012 at 12:16 PM
  • News

    John Paulson’s Got Good News And Bad News

    The bad news, if you’re a Paulson & Co investor that doesn’t have a special situation worked out with JP on the side, is that the firm’s funds are down by a lot. A whole lot. The good news is that you’ve all now been offered a unique opportunity.

    / Dec 22, 2011 at 4:12 PM
  • Communiqués

    John Paulson Is Sorry

    Hedge fund legend John Paulson apologized to investors for what he is calling a year that has been “the worst in the firm’s 17 year history.” “We are disappointed and apologize,” the Paulson Funds said in a letter to investors obtained by CNBC. Hedge fund legend John Paulson apologized to investors for what he is […]

    / Nov 29, 2011 at 3:33 PM
  • News

    Don’t Call It A Comeback

    John Paulson, the hedge-fund manager having the worst year of his career, rebounded 2.4 percent in his main fund in October and climbed in all his strategies…Paulson’s main fund, the Advantage Plus Fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, reduced its year-to-date loss […]

    / Nov 4, 2011 at 10:47 AM
  • Hedge Funds

    Those Losses Are Harder On John Paulson Than They Are On You

    On Thursday, as Paulson spoke on a panel at an industry conference, he was asked what keeps him up at night, to which he responded: “I haven’t been getting a whole lot of sleep lately,” according to a person who was there…Paulson [also] told the audience that he doesn’t like losing money. [WSJ]

    / Oct 20, 2011 at 4:30 PM
  • Hedge Funds

    John Paulson: Mistakes Were Made

    Mr. Paulson, the money manager who made billions during the financial downturn betting against the subprime mortgage market, admitted in his quarterly conference call that he had made a bad bet on a recovery in the domestic economy, the linchpin of the firm’s investment thesis this year. Now, Mr. Paulson is moving to cut leverage […]

    / Oct 12, 2011 at 5:45 PM
  • Hedge Funds

    Paulson And Co Investors Standing By Their Man

    John Paulson, the billionaire hedge- fund manager having the worst year of his career, has received less than 10 percent in redemption requests for his Recovery and Credit Opportunities funds for year’s end, according to two people familiar with the firm. Withdrawal orders for those two funds, which together managed about $15 billion as of […]

    / Oct 11, 2011 at 12:34 PM
  • Hedge Funds

    Paulson And Co. Investors May Be Getting Coal In Their Stockings This Year

    One of the stocks in Paulson’s portfolio, Alpha Natural Resources, is getting clobbered today after the company and rival Walter Energy warned that output for steelmaking-coal will fall short of expectations…Paulson’s bet on Alpha Natural Resources is a relatively small chunk of his portfolio, but it is another ill-timed wager this year from the man […]

    / Sep 21, 2011 at 3:46 PM
  • News

    John Paulson Made Money Last Week

    That feels good to say, doesn’t it?

    / Sep 1, 2011 at 10:13 AM
  • News

    Just Paulson Has Seen Better Summers

    The market volatility of last week was not kind to the hedge fund behemoth John Paulson, whose flagship fund was down 34 percent through Friday’s close, according to an investor who was briefed on the performance today…Paulson’s merger funds are faring considerably better, though still in the red with the enhanced levered fund down 7 […]

    / Aug 17, 2011 at 6:47 PM
  • Hedge Funds, News

    John Paulson Explains What’s Been Going Wrong

    His portfolio has been heavy on disappointments.

    / Jul 21, 2011 at 3:22 PM
  • Hedge Funds, News

    Don’t Shed A Tear For John Paulson Just Yet

    His investors don’t appear bothered by the whole fake trees incident and not even all of his funds are down. You’re only hearing about the ones not doing as hot being people love to tear a big man down.

    / Jul 12, 2011 at 4:37 PM
  • Hedge Funds, News

    Fake Trees Hurt Paulson And Co’s Flagship Fund In June

    Bloomberg reports the Advantage Plus Fund, Paulson’s flagship, lost 11 percent in June thanks to Sino-Forrest.

    / Jul 7, 2011 at 2:30 PM
  • Hedge Funds, News

    John Paulson Saves An Art Gallery

    The fund run by Paulson & Co. has purchased a loan to American-art specialist Berry-Hill Galleries for about $10 million, as well as the mortgage on the gallery’s property in an elegant townhouse near the Frick Collection, according to public records and people familiar with the matter…The involvement of the fund, Paulson Credit Opportunities Master […]

    / Jun 29, 2011 at 6:13 PM
  • Hedge Funds, News

    Paulson And Co Only Lost $107 Million On Well-Researched Sino-Forest Bet

    Not really enough to get upset or even mildly perturbed over, though in a letter to investors today re: the Chinese company, Paulson did note that “as the largest investors in the Paulson Advantage strategy,” the disappointment in the lack of trees is shared by the Paulson partners.

    / Jun 24, 2011 at 12:53 PM
  • Hedge Funds, News

    Gold Finds A Way To Kick John Paulson When He’s Down

    Really? He really needs this shit right now, after the fake trees incident?

    / Jun 23, 2011 at 11:37 AM
  • News

    Sino-Forest Can’t Hold John Paulson Down!

    A 2009 investment in a company that acquired assets from failed lender IndyMac is up some 200 percent, the billionaire hedge fund manager told investors when he met with some of them in Paris earlier this month. The paper gain in the value of OneWest, the newly minted Pasadena, California-based bank, is responsible for much […]

    / Jun 22, 2011 at 1:05 PM
  • News, Opening Bell

    Opening Bell: 06.16.11

    Uncertainty Over Greece Weighs on Financial Markets (NYT) Financial markets remained jittery Thursday amid concerns about the stability of the government in Athens, uncertainty over the fate of a second Greek bailout and suggestions by Ireland that it would require investors to pay for part of the bailout of its indebted financial institutions. Paulson Funds […]

    / Jun 16, 2011 at 7:50 AM
  • News

    John Paulson’s Investors Were On A Boat

    John Paulson’s annual midyear investor event, held on June 7-8 in Paris, featured notable speakers, workshops on the firm’s major strategies and a dinner cruise on the Seine. Unlike the firm’s recent soiree in Las Vegas, which was held solely for investors in his advantage funds, this event was open to anyone invested in the […]

    / Jun 9, 2011 at 4:53 PM
  • News

    John Paulson May Have Lost Some Money Since Yesterday

    After opening at $18 yesterday, [Sino-Forest] just touched $2.45, generating a loss of over $500 million for John Paulson, who in addition is rumored to be very heavily long the company’s bonds. [ZH, earlier]

    / Jun 3, 2011 at 2:08 PM

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