Gold Co. Swoon Costs Paulson Almost $50 Million

Jul 27 2012 | 11:47am ET

John Paulson can't catch a break. The Paulson & Co. founder has been trying—and, so far, failing—to turn around the performance of his hedge funds. Now, one of his largest holdings has suffered its worst slump in three years, a slump that may have cost Paulson $48.9 million.

NovaGold Resources' stock fell 25% yesterday after Barrick Gold Corp. said that its joint-venture with NovaGold falls short of the its investment criteria. NovaGold has said it plans to continue to develop the venture.

Worse still for Paulson, his 915,000 shares of Barrick suffered a paper loss of almost $1 million yesterday, as well.

Paulson, whose largest fund lost half of its value last year, and who has seen many of his funds post double-digit losses in the first six months of this year, is the very model of a gold bug. He runs a dedicated Gold Fund—down 23% this year—and all of his other hedge funds are available in gold-denominated shares.

Paulson's hedge fund is NovaGold's second-largest shareholder, owning 13% of the company. And it's not Paulson only gold loser: AngloGold Ashanti, the hedge fund's third-largest stock holding at the end of the first quarter, is down 21% this year.

Paulson isn’t alone in suffering over NovaGold: Baupost Group, Blue Ridge Capital and York Capital Management all held stakes in the company.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...