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Former Paulson Protégé In A Charitable Places About Losses

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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 he was getting enough credit for netting the hedge fund billions via 'the greatest trade ever.' PSQR returned 40% in 2008 and 61.6% in 2009 and then in August 2010, Pellegrini gave back all outside investor capital, stating that he would be focusing on managing his own money. And speaking of Paolo's pennies, the ones he had invested with Paulson have taken a li'l bit of a hit lately. But according to Big P, who previously dabbled in DJ'ing and efforts to get pot legalized, it's all good.

At the beginning of last year, Mr. Pellegrini invested in Paulson Advantage Plus, the fund that has stumbled badly. The sum invested was "a significant portion of my personal money," Mr. Pellegrini says. Two other people familiar with the investment say it was between $10 million and $20 million. Mr. Pellegrini says he withdrew half of his remaining money at the beginning of this year after the previous year's losses. But Mr. Paulson's cold streak has continued, with the Advantage Plus fund down more than 16% this year through June, according to an investor...Despite the setback, Mr. Pellegrini, a 55-year-old native of Italy who now lives in Manhattan, says he isn't bitter. "I'm disappointed but I don't fault them for not doing their work," Mr. Pellegrini in an interview. "This is a very difficult market to predict…as an investor, it's like a game of Russian roulette." Referring to Mr. Paulson, Mr. Pellegrini says: "Among global fund managers, John's one of the most talented."

Considering the fact that that's one of the nicest things anyone who's lost money with Paulson has had to say in recent memory, it sounds like all that stuff about JP 'humiliating' and under-appreciating Pellegrini is water under the bridge. And not to get too far ahead of ourselves but perhaps it's time to get the old gang back to together again? Think about it: Pellegs is unemployed, Paulson needs to pull himself of the mire (and muck) he's wallowing in and Paolo may or may not be his lucky rabbit's foot. Just something to consider.

Paulson Ex-Lieutenant Caught in Fund's Slide [WSJ]


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