Paulson says his funds' fortunes are up; bullish on buying homes
NEW YORK (Reuters) - Hedge fund billionaire John Paulson wants the world to know he is having a good year.
After two years of losses in his once enormous Advantage Funds, Paulson has something to brag about in 2013 with his Recovery fund up 25.22 percent and his Paulson Enhanced fund up 15.63 percent. The Paulson Credit Opportunities fund is up 11.2 percent, even after some losses in June.
"We are having a very strong year," Paulson told an audience of investors and hedge fund managers at the CNBC Institutional Investor Delivering Alpha Conference on Wednesday.
He also said his $19 billion firm appears to be back in the groove of a long-term record that made it popular with pension funds and private investors alike.
Paulson shot to fame in 2007 with a prescient bet against subprime mortgages and repeated his success in 2009 with a bet on gold.
This year, however, his gold bet has been wrong-footed with a loss of 65 percent in the first half of the year for the $300 million portfolio, which is the smallest of his lineup and which is now largely his own money.
Despite the poor performance, Paulson is convinced gold will rebound, especially because he expects inflation to pick up. "If you are looking for a hedge for potential inflation for the future and have a longer term view, then gold is still a good bet," he said.
As for investments that are already paying off, Paulson reiterated his big bet on U.S. real estate, urging private investors to do the same by buying a house or consider buying a second house. "We are in the first year of a five- to seven-year opportunity," Paulson said.
Paulson launched a first real estate vehicle, the Real Estate Recovery fund, in 2009, buying up tracts of yet-to-be-developed residential and commercial land around the United States. His firm is currently raising a second real estate fund.
In the CNBC interview, Paulson was not asked to comment on the securities fraud trial of Fabrice Tourre, a former Goldman trader, who sold many of the subprime securities to investors that Paulson was betting against.
The 57-year-old Paulson also sounded a bullish note on potential deals in the cable and wireless sectors.
"We are in a healthy M&A environment that is going to get better," he said.
He shrugged off any suggestion that it was time to get out of the business. "It is realistic that I will do this for another 20 years," he said, saying he admires octogenarian investing star Warren Buffett and plans to emulate his longevity.
(Additional reporting by Sam Forgione; Editing by Leslie Adler)
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