Paulson Falls Further In May As Timber Co. Bounces Back

Jun 6 2011 | 3:09pm ET

Paulson & Co. early-year losses grew last month as the $37 billion firm's flagship posted losses of almost 6%.

The $9 billion Advantage Plus Fund dropped 5.93% in May, leaving it down 7.54% on the year, Reuters reports. The fund opened the year with big losses in January, but managed to erase them in February. Since then, the fund has lost that momentum, posting more modest losses in succeeding months.

The less-levered version of the fund, Paulson Advantage, lost 4.06% on the month and is down 5.26% on the year, and Paulson's dedicated Gold fund lost 6.39%, but remains up 0.79% on the year.

June does not look like it will be any kinder to Paulson, which opened the month losing hundreds of millions of dollars on its investment in Sino-Canadian timber company Sino-Forest Corp. But Sino-Forest has continued to battle allegations of fraud made by hedge fund Muddy Waters, issuing a second defense today.

Sino-Forest, of which Paulson is the largest shareholder, posted documents that it claims support its disclosed holdings on timber land in China's Yunnan Province, leading to a big rally in its shares, which dropped 71% on Thursday and Friday. Shares are still trading at less than half their value from before the Muddy Waters research was released.

"The company believes Muddy Waters' report to be inaccurate, spurious and defamatory," Sino-Forest said, adding that it was "considering its legal remedies."

For all of Paulson's troubles this year and this month, some of its other funds have enjoyed some success—or less failure. The gold-denominated version of Advantage Plus is down only 1.3% on the year, while his Enhanced Fund is up 11.5% through May, when it lost 0.02%. Paulson Partners gained 0.08% in May and is up 6.64% on the year. Its Credit Fund lost 0.05% on the month (up 7.94% year-to-date) and its Recovery Fund lost 0.69% (up 5.03% YTD).


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

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.