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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.

The drop left Paulson’s Advantage Plus Fund, which uses strategies designed to profit from corporate events such as takeovers and bankruptcies, down 18 percent this year, said the client, who asked not to be named because the information is private...Paulson’s dollar-denominated Advantage Fund, which employs
a similar strategy to Advantage Plus, dropped 7.3 percent last month and 12 percent this year...The firm’s Gold Fund, which can buy derivatives and other gold-related investments, fell 8.6 percent in June, leaving it down 7.9 percent for the year. The Paulson Partners Enhanced Fund, which invests in the shares of merging companies, decreased 4.7 percent last month and gained 6.1 percent in 2011. The gold share class declined
5.8 percent in June and advanced 8.9 percent this year.

Paulson’s Credit Opportunities Fund declined 2.7 percent last month and climbed 5 percent in 2011. Its gold shares lost 3.9 percent in June and gained 7.9 percent this year.

Paulson’s Main Fund Said to Lose 11% in June on Sino-Forest Sale [Bloomberg]


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?