Paulson has mixed November as softer gold hurts some funds

BOSTON Fri Dec 7, 2012 6:38pm EST

President and Portfolio Manager of Paulson & Co. John Paulson speaks during the Sohn Investment Conference in New York, May 16, 2012. REUTERS/Eduardo Munoz

President and Portfolio Manager of Paulson & Co. John Paulson speaks during the Sohn Investment Conference in New York, May 16, 2012.

Credit: Reuters/Eduardo Munoz

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BOSTON (Reuters) - Hedge fund manager John Paulson told his clients on Friday evening that his funds experienced mixed returns in November with softer gold prices weighing on some portfolios.

The billionaire fund manager, whose New York-based Paulson & Co. oversees $20 billion in assets for clients, recently told investors that losses in Europe hurt but he was more optimistic about the housing industry.

On Friday Paulson said his Paulson Partners fund, which specializes in merger-arbitrage, climbed 1.44 percent in November and is up 6.67 percent for the year, a person familiar with all of Paulson's funds said.

Paulson also reported that the firm's biggest portfolio, the Credit Opportunities fund, was flat for the month and is up 5.59 percent for the year. The credit funds have more than $6 billion in assets.

A slide in gold prices during November, however, weighed on both the Advantage fund and the Gold fund. Advantage fell 4.66 percent last month and is now off 16.68 percent for the year while the Gold fund dropped 11.56 percent and is off 20.57 percent for the year.

The numbers deliver more bad news to some Paulson investors at a time the manager's every move is closely monitored. He has been among the industry's most famous fund managers ever since he earned billions on a bet against the overheated housing market in 2007.

With the Advantage funds down again in November it is almost impossible for Paulson to deliver positive numbers in this strategy this year. Last year Paulson made headlines when he suffered heavy losses in the funds thanks to an overly optimistic view on economic recovery.

Although the losses in Advantage are closely watched, the funds are no longer the firm's largest and overall some 60 percent of firm assets are in the black.

Late Friday there was also a piece of good news for Paulson when Canada approved Cnooc Ltd's acquisition of Nexen, in which Paulson holds a large stake.

(Reporting By Svea Herbst-Bayliss; Editing by Leslie Adler)

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