It isn't exactly 2007, but after the past two years, John Paulson will take it.
Paulson's hedge funds—with one notable exception—have been standouts this year, returning between 14% and 45%, The Wall Street Journal reports. That makes Paulson & Co. among the rare hedge funds to compete with—or beat—the Standard & Poor's 500 Index's 23% return this year.
Paulson told investors at his annual presentation last week that his Recovery Fund is the firm's top performer, up 45% through the end of last month. His merger fund is on the other end, up 14%, though a levered version of that vehicle is up 28%. Only his Gold Fund is in the red this year, and while it is deep in the red, with a 63% loss, it is composed primarily of Paulson's own capital. All told, the firm has about $19 billion in assets under management.
Looking forward, Paulson said that he expects an increase in merger activity next year, particularly in oil, telecommunications and healthcare.