Paulson Joins Hedge Fund Gold Rush

Mar 19 2009 | 2:46am ET

For hedge funds, 2009 is starting to feel more like 1849.

Another major hedge fund is joining the gold rush: Paulson & Co. has bought a $1.28 billion stake in South African gold mining company AngloGold Ashanti. The New York-based hedge fund is now the second-largest shareholder in AngloGold.

Paulson bought its stake from Anglo American, the British mining conglomerate.

“We believe AngloGold Ashanti is one of the best-managed and undervalued of the major gold-mining companies,” John Paulson said.

Paulson made its name in 2007, when it rode the collapse of the subprime mortgage market to triple-digit returns. The hedge fund is also a major shareholder of Kinross Gold Corp., the Canadian mining company. Nor is Paulson the only hedge fund betting on gold: Third Point and Greenlight Capital have recently moved large portions of their assets into the precious metal.

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