Paulson Gold Fund Fails To Attract Investors

Feb 11 2010 | 10:20am ET

Despite his unsurpassed track record, investors have proven wary of John Paulson’s new gold fund.

Paulson poured a quarter-billion dollars of his own money into the new vehicle, which debuted on Jan. 1. But clients have added only $90 million of their own to it.

The fund dropped 14% in January after the precious metal’s year-long rally ended last month.

Paulson & Co. burst onto the scene in 2007, producing triple-digit returns betting against the subprime market. It’s also posted consistently positive returns over the past two years. The New York-based firm’s main hedge funds are currently big investors in gold, with about 10% of its assets invested in the precious metal and related investors.

But some doubt Paulson’s commodities-trading skills, The Wall Street Journal reports. Others think they can do just as well investing in levered exchange-traded funds, which don’t feature a three-year lockup, $10 million minimum investment or 20% performance fee.

Others just think that it is an inopportune time to jump in feet first.

“It’s purely my negative view on gold in the short run,” Christopher Zook of CAZ Investments told the Journal. “I just am waiting for hopefully a better entry point.”

Still, it is early going for the six-week-old fund. The Journal notes that Paulson had trouble attracting investors to his credit fund in 2006, a year before his bets proved tremendously profitable.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.