BOSTON, March 7 Hedge fund billionaire John
Paulson's Gold Fund tumbled 18 percent last month when gold and
gold mining stocks slid further, two people familiar with the
Paulson's Gold Fund has roughly $800 million in assets and
ranks as the smallest portfolio within the New York-based firm's
lineup, but thanks to a steady decline in gold prices its large
losses have been grabbing headlines for months.
Launched in 2010, the gold fund has lost 26 percent in the
first two months of 2013.
Roughly 70 percent of Paulson & Co's $18 billion in assets
are invested in funds pursuing his credit, merger and recovery
strategies. Those funds eked out small gains last month and are
The firm's biggest success this year has been its
merger-arbitrage oriented Paulson Partners Enhanced fund, which
is up 7.7 percent after having extended January's strong gains
with a 1.1 increase last month.
Investors have long paid close attention to John Paulson's
bets after he earned billions by betting against the overheated
housing market in 2007. But 2011 and 2012 have been tough years
for the publicity-shy fund manager when a number of missteps
including being too optimistic about economic recovery cost him
billions in assets. The firm now oversees about $18 billion,
down from about $38 billion two years ago.
Despite the sharp decline in gold prices, Paulson is
sticking with his thesis that inflation will pick up at some
point in the future when the metal can be a hedge.
Returns at Paulson's other funds were mixed last month with
his credit, merger and recovery oriented portfolios posting
small gains while his Advantage funds suffered fresh losses.
Paulson Credit Opportunities inched up 1.4 percent last
month and is up 4.4 percent year to date. The Recovery fund is
up 5.3 percent for the year after climbing 1.5 percent in
The Paulson Advantage Fund, which bets on big corporate
events like acquisitions and bankruptcies, dipped 3.5 percent
last month and is off 2.6 percent for the year.