Paulson Feels The Pain In June

Jul 8 2011 | 1:15pm ET

June was exceptionally unkind to Paulson & Co., even for those funds that did not lose $574 million on a single investment.

The New York-based hedge fund giant saw all of its hedge fund lose ground last month, none more so than the Advantage Plus Fund, the $37 billion firm's largest. That fund dropped 11% in June—leaving its dollar-denominated share class down 18% on the year and its gold-denominated share class down 12%—primarily on the firm's disastrous investment in Chinese timber company Sino-Forest Corp., Bloomberg News reports.

Sino-Forest shares dropped by more than 80% last month after hedge fund Muddy Waters accused the company of overstating its timberland holdings in China's Yunnan Province. Paulson had owned 12.5% of the company but sold its entire stake after the Muddy Waters report.

Paulson's flagship Advantage Fund, which also owned Sino-Forest shares, lost a further 7.3% in June and was down 12% in the first half. The gold-denominated version of the fund lost 8.1% on the month, wiping out its small year-to-date gain and leaving it down 7% for the first six months of the year.

Paulson's other funds hardly did better. Its Gold Fund dropped 8.6% in June, also pushing it into the red year-to-date, down 7.9%. The firm's Partners Enhanced Fund fell 4.7% in June to cut its year-to-date returns to 6.1%; that fund's gold version lost 5.8% in June but is up 8.9% on the year.

The Paulson Recovery Fund fell 3.6% in June to slash its first half return to just 1.2%, although the gold version remains up 3.4% on the year after losing 5.2% last month. And Paulson's Credit Opportunities Fund shed 2.7% in June to cut its six-month return to 5%; the gold shares fell 3.9% on the month and are up 7.9% on the year.

All is not yet lost, of course: Paulson Advantage was down by double-digits as late as September of last year but finished 2010 up 11%.


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 race. 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...

 

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.