Paulson Falls In April

May 9 2012 | 9:57am ET

Paulson & Co.'s promising start to the year has not—yet—augured a return to form for the battered hedge fund.

Paulson's Advantage Plus fund, which lost 52% last year, lost a further 6.7% in April, Bloomberg News reports. The fund, which was hit by declines in its gold-mining stocks, is now down 8.8% on the year.

Advantage Plus actually rose 5% in January. The fund has lost ground in the three months since.

Advantage, the unlevered version of Advantage Plus, fell 5% last month and is down 6% on the year.

"Over the last 12 months there's been a disconnect between buyers of gold bullion, like central banks who are strategic long-term holders of gold, and the buyers of gold equities, who may believe gold prices will fall in the short term," Paulson wrote to investors in the first of what he promised would be a monthly "commentary" on performance. "This disconnect has caused a large discrepancy between the gold spot price and the implied valuation of gold through gold equities."

Still, Paulson said, its funds are up 1.7% for the year on average. It's Recovery Fund is up 8% through April after losing 1.4% last month. Paulson Enhanced is up 12% despite a 0.9% drop in April, and Credit Opportunities is up 4.2% after dropping 0.7% last month.


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