Friday, 25 July 2014
Last updated 1 hour ago
Aug 29 2012 | 1:11pm ET
John Paulson sought to soothe investors in his struggling hedge funds yesterday, assuring them that he was confident his strategies would pay off and that the firm was not seeing an unusually high number of redemption requests.
The Paulson & Co. chief participated in a conference call with Bank of America advisers and clients, organized by the bank. While Paulson speaks with the former quarterly, yesterday afternoon's call gave investors a chance to express their concerns and ask questions of the hedge fund manager.
Given Paulson's performance over the last year-and-a-half—his flagship lost 36% last year and is down 13% this year, and a more highly-levered version of that fund lost 51% last year and is down 18% this year—one might have expected a contentious call. But a person familiar with the matter told The Wall Street Journal that the tone wasn't "agitated or aggressive, even though some people were frustrated."
BofA alternative investments chief investor officer Spencer Boggess opened the call, which began with a vote of confidence from the bank, whose executives praised Paulson's "high-quality work," at about 4:45 p.m. yesterday. Paulson then spoke for a few minutes before taking questions from the more than 2,000 people on the call.
He said that the firm isn’t facing an unusual number of redemptions, and assured investors that he had no plan to follow in the footsteps of some of his peers by returning outside money or retiring.
Among the questions he faced were queries about a timetable for turning things around; Paulson didn't take the bait, noting that he needed only some investments to improve their performance. He added that his aim was to earn back all of the money he's lost.
The call followed, but was not prompted by, Citigroup private bank's decision last week to pull Paulson from its hedge-fund platform. That move is expected to result in more than $400 million in redemptions.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…