Paulson Gold Fund Extends Losses, But Isn't Giving Up

Mar 6 2013 | 11:32am ET

Paulson & Co.'s Gold Fund is already down by double-digits in 2013.

The $900 million fund, which invests primarily in gold-mining equities, is down 10% through February, CNBC reports. The fund lost 25% last year.

Despite the big losses—which have come as physical gold prices have doubled—Paulson is sticking with its strategy. Firm founder John Paulson argues that when all of the money printed by central banks as part of quantitative easing programs comes into circulation, a growing demand for a limited supply of the precious metal will make his mining bets pay off. The firm has no plans to shutter the fund.

That's apparently fine by many of the fund's investors. According to CNBC, some have threatened to redeem if Paulson abandons its three-to-five year thesis, even as some investors, such as Lyxor's hedge fund platform, have already given up on the fund.

Lyxor contributed about $15 million to the Gold fund.


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