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

An Interview With Harvest Volatility Management's Rick Selvala

Mar 23 2017 | 5:39pm ET

Several years of extremely low interest rates have pushed some investors into equities...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...