| BOSTON, April 24
BOSTON, April 24 Billionaire investor John
Paulson told investors on Wednesday he is staying the course on
gold even though there may be more short-term volatility in the
price of the metal.
The New York-based hedge fund manager has long stuck by his
thesis that gold will someday be a powerful hedge against
inflation, and it was no different on the investor call he held,
two people who listened to the call said.
John Reade, a partner at Paulson & Co, said that the firm,
which oversees about $18 billion, is not veering off its course
even as he cautioned that there could be more price fluctuations
in the short term.
A spokesman for Paulson did not immediately return a call
Paulson held the firm's regularly scheduled quarterly call
to speak in more detail about the first quarter, when the bulk
of his funds delivered positive returns. That marked an
improvement from 2012 and 2011, when his best-known portfolios,
the Advantage Funds, chalked up double-digit losses each year,
with the Advantage Plus fund losing more than 50 percent in
Paulson had released his quarterly letter to investors,
which included results, three weeks ago. On Wednesday, clients
had a chance to ask questions.
Since the end of the first quarter, gold prices have dropped
dramatically, raising concerns about Paulson's performance and
how he might react to it. However, recent demand for physical
gold has been seen as a steadying force and the price has
Paulson's small gold-oriented fund, which was already down
28 percent in the first quarter, lost more money recently. But
Paulson said the bulk of assets belong to Paulson himself, which
makes any sort of investor run on the fund highly unlikely.
Paulson's Recovery Fund delivered some of the best returns
in the industry, with a 14 percent return during the first
quarter. Also, news on mergers has recently been positive for
The investor became one of the most closely watched fund
managers after he earned billions in 2007 by betting against the
overheated housing market.