Tuesday, 21 October 2014
Last updated 1 hour ago
Apr 21 2010 | 7:54am ET
Paulson & Co. has begun a full-court press to reassure its clients that the firm is in no danger from the fraud case against Goldman Sachs that prominently features the $32 billion New York-based hedge fund.
On Monday, firm founder John Paulson spoke with about 100 investors on a conference call. Yesterday, he sent a letter defending the firm’s conduct in the collateralized debt obligation in question, which Paulson paid Goldman $15 million to structure and market.
In the letter, Paulson noted that, at the time of the transaction in April 2007, few knew who he was. “Many of the most sophisticated investors in the world” were “more than willing to bet against us,” he wrote, according to The Wall Street Journal.
It was a theme Paulson also touched on during the conference call, noting that the nature of the CDO was that there had to be a short investor betting against the residential mortgage-backed securities included in the deal.
Neither Paulson nor his fund has been accused of any wrongdoing, and no such accusations are apparently in the offing, he said on Monday. In response to a question from an investor, Paulson said no one at the firm had received a Wells notice from the Securities and Exchange Commission, which sued Goldman over the Paulson CDO on Friday. A Wells notice indicates that the regulator plans to bring an enforcement action.
While some investors have expressed concerns about the lawsuit and have indicated they might pull their investments, Paulson said the firm has not yet received any redemption notices. Clients have until next Friday to file a withdrawal request to redeem their investment at the end of June.
“It’s not a rush for the doors,” one investor who participated in the call told the Journal.
“We are interest in buying out people who want to get out of Paulson, but so far no one has stepped forward,” another told Reuters.
Paulson earned nearly half of its $32 billion in assets betting against the subprime mortgage market in 2007.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...