Thursday, 23 October 2014
Last updated 13 hours ago
Oct 13 2011 | 2:23am ET
Paulson & Co. has won a much-needed endorsement from a major investor as it braces for potentially large redemptions at the end of the month.
The Public Employees Retirement Association of New Mexico is sticking with the New York-based firm, which has seen its largest hedge fund lose 47% this year. The system has been a Paulson client since last year.
"We don't have any plans for action," the pension's chief investment officer, Joelle Mevi, told Reuters. "Prior to these last months, we've had good performance with Paulson."
It's unclear how many Paulson clients will take that position: The firm told investors this week that it could have to pay out as much as 25% of its $30 billion in assets in redemptions by the end of the year, and Reuters reports that Paulson's Advantage and Advantage Plus funds are currently about 30% in cash to prepare for the withdrawals.
New Mexico is advised by Cliffwater, which has not indicated how it will recommend its other clients proceed with their Paulson investments.
New Mexico's patience with Paulson may have limits: The pension's board will likely vote at the end of the month to redeem its $40 million investment with Diamondback Capital Management. New Mexico stuck by Diamondback after it was linked to an insider-trading scandal last year, but a decline in performance and lingering issues related to that scandal—Diamondback has not been charged with any wrongdoing—appears to have pushed the pension too far.
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…
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