Paulson & Co. plans to launch a new hedge fund designed to lower clients' tax bills.
Paulson yesterday sent an invitation to both current and potential clients to announce the launch of Paulson Partners Premium. The invitation said the fund would serve investors "looking to mitigate income taxes," but did not specify how it would do so. Presumably, details will be offered at an April 24 meeting at Paulson's New York offices.
Firm founder John Paulson will discuss the new "risk-arbitrage fund" during a 75-minute presentation. Fifteen of those minutes will be dedicated to tax-deferred and tax-free options for investing in the fund.
Paulson's oldest hedge fund, Paulson Partners, is a merger arbitrage strategy that has posted annualized returns of 15% since its 1994 debut, and recently breached its high water-mark. Paulson also runs a more highly-levered version of that fund, Paulson Partners Enhanced, which has annualized returns of 19%. Combined, the funds manage about $5 billion.
Paulson recently took heat over rumors that he was considering a move to Puerto Rico, which recently adopted a law waiving local and federal capital gains taxes for new residents. Paulson denied that he was planning to leave New York, his lifelong home.