* Paulson's Advantage Fund down 6.14 pct in March
* Paulson's moves, returns always closely watched
By Svea Herbst-Bayliss
BOSTON, March 18 Billionaire stock picker John
Paulson's flagship fund fell more than 6 percent in the first
two weeks of March, hit hard by falling financial markets after
the crises in Japan.
The Advantage Plus fund, which has roughly $4 billion in
assets, was off 6.14 percent through March 15 as some of his big
bets on the rising fortunes of U.S. bank stocks and the housing
market soured. Since the start of the year, the fund has lost 5.29
percent, according to an investor who is not allowed to speak
about performance publicly.
A spokesman for Paulson declined to comment.
A broad selloff struck world markets this week amid Japan's
unfolding nuclear calamity. Japan's stock market lost 20 percent
in the two days of trading after the devastating earthquake and
tsunami hit on March 11.
The broad Standard & Poor's 500 index .SPX was off 3.4
percent for the month through March 15.
The Paulson International Fund, offered on Societe Generale's
Lyxor platform, was down 2.25 percent through March 15 but is up a
smidgen, 0.21 percent, since the start of the year.
Paulson was not alone in posting poor numbers during the first
weeks of March and the numbers on the Lyxor platform did not
capture some very recent gains in the market, investors pointed
Recently listed by Forbes as the world's 39th richest man
with a net worth of $16 billion, Paulson has become one of the
hedge fund industry's most closely watched traders in the last few
With $36 billion in assets, his New York-based Paulson & Co
ranks as one of the world's biggest hedge funds thanks largely
to successful bets on subprime mortgages and gold.
Last year, Paulson said that he expected growth to rebound
and housing to take off and therefore ramped up on bank and
housing stocks which helped his fund deliver another strong
year in 2010. Early this month, the bets were not as lucky.
Some of the likely losers in Paulson's portfolio include
shares of Citigroup (C.N), his second biggest holding at the end
of December, which is off 4.2 percent this month. Anglogold
Ashanti Ltd (ANGJ.J) (AU.N) his third largest holding, is down 7.6
percent in March and Anadarko Petroleum Corp (APC.N) is down 4.7
percent. Bank of America (BAC.N) and the SPDR Gold Trust (GLD.P)
are the other holdings in his top five and they were performing
Paulson, whose fund has become a favorite with pension
funds in Indiana and New York and with wealthy investors here
and abroad, earned his reputation as a star trader after
scoring big gains in 2007 from a massive bet on the collapse of
the U.S. housing market.
He followed that last year with his savvy trade on gold and
bets the metal would soar as investors looked for other asset
classes to park cash after the Federal Reserve's decision to keep
interest rates at record level lows.
Now some investors are wondering what his next big bet will
be and how it will fare.
While this month's losses grab headlines, Paulson was in a
similar position last year when many of his portfolios were in the
red until late into the summer when the losses vanished and he
ended the year up, again.
(Reporting by Svea Herbst-Bayliss; Editing by Phil Berlowitz)