Paulson's Gold Horde Angers Some Investors

May 25 2012 | 3:27am ET

John Paulson's continuing love for one particular shiny object has some of his investors fuming.

Paulson & Co.'s flagship hedge funds have about a quarter of their assets invested in gold and gold-related investments. But those bets aren't paying off, and some investors are lashing out, or pulling out.

The New York-based firm has said that redemptions remain low despite its main funds' dismal performance both this year and last, when they lost between 30% and 50%. Paulson said that net redemptions totaled just 2% of assets in the first quarter, with a similar withdrawal level expected this quarter.

But the New York Post reports that some investors are getting restless, and blaming the hedge fund founder's taste for gold for their troubles. According to the Post, some investors think Paulson's strong backing for gold is an attempt to revive his reputation after last year's disaster.

"I would be happier if he cut the gold position in half," one redeeming investor told the tabloid. "He would have been up 4% in the first quarter if it weren't for the goddamned gold."

Paulson's Advantage Fund is down 6% through April, while the more highly-levered Advantage Plus Fund is down 8.8%.


In Depth

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...