Paulson and Co

Some of the questions focused on Mr. Paulson’s flagship fund’s performance, which he admitted was disappointing, though the tone of the call wasn’t “agitated or aggressive, even though some people were frustrated,” said a person familiar with the discussion. One person asked Mr. Paulson for a timeline of how long it would take to turn things around. He declined to specify a timeline, but said his objective was to win back the losses the fund had suffered. Mr. Paulson said the fund didn’t need a broad market rally. Instead, he noted, some specific investments would need to perform better.  [WSJ, related]

Citigroup’s private bank is pulling about $500 million from Paulson & Co., the hedge fund run by billionaire John Paulson seeking to reverse record losses in 2011, according to two people familiar with the matter. The private bank is redeeming from Paulson’s Advantage Fund and Advantage Plus Fund, said the people who asked not to be identified because the information is private…Citigroup’s private bank in May advised clients not to add money to the Paulson funds, a person familiar with the matter said at the time. [Bloomberg]

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 up by the fact that AP was down 16 percent through June.  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 $21 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. Read more »

“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 style drift” — investor-speak for getting into areas outside one’s expertise. And, Mevi says, “The Sino-Forest issue was notable.” “If you’re going to come in and then leave, come in and leave, I don’t think you’ll reap the benefits of investing with us,” Paulson says. “Investors that do the best, and have done the best, are those that stay and compound at above-average rates over the long term.” [Bloomberg Markets, earlier]

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 Limited Partner, and probably more, are so not over him. Read more »

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 percent this year. Paulson & Co., which manages about $24 billion, posted losses during May in its Advantage funds, Recovery Fund and Partners Enhanced fund. Paulson’s Credit Opportunities Fund rose 0.9 percent last month and 5.3 percent in 2012. [Bloomberg]