Tuesday, 31 May 2016
Last updated 3 days ago
Nov 15 2011 | 11:29am ET
Paulson & Co. has cut its most successful holding of the year and boosted one of its least successful.
The New York-based hedge fund, which has been the most enthusiastic investor in gold, sold off one-third of its holdings of the precious metal, it said in a regulatory filing yesterday. The sale of 20.3 million of its 31.5 million SPDR Gold Trust exchange-traded fund shares reduces Paulson' gold holdings by nearly $2 billion.
The sale could be linked to redemptions: Investors filed withdrawal requests totaling about $2.4 billion.
Gold-watchers were skeptical that Paulson had lost its taste for gold: "We doubt Paulson's gold fever has run its course," ANZ Research said.
On the other hand, Paulson added to its holdings of one stock that has not been kind to it: Bank of America. The hedge fund boosted its stake in Bank of America by 6.4%, although it cut its stakes in other financial stocks, including Citigroup and Wells Fargo.
Other hedge funds are less sanguine about BofA: Appaloosa Management, Kingdon Capital Management, Highfields Capital Management and Lansdowne Partners all cut their holdings in the bank—to the bone. All four sold off all of their shares in the bank. Other hedge funds merely reduced their holdings, including Carlson Capital and Odey Asset Management.
But Paulson isn’t alone in backing BofA. Berkshire Hathaway and hedge fund Fairholme Capital Management both added to their holdings of the bank.