BOSTON, March 7 Most hedge funds had good
news for their investors last month but not John Paulson, who
told clients that one of his biggest portfolios lost money,
The HFRI Fund Weighted Composite Index climbed 2.14 percent
in February and is now up 4.95 percent for the year, Hedge Fund
Research reported on Wednesday.
As one of the $2 trillion hedge fund industry's most closely
watched barometers of success, the HFRI index shows that most
strategies are making money this year thanks to rallying stock
markets fueled by hopes for stronger growth and a solution to
Europe's debt problems. The HFRI Equity Hedge Index climbed 6.9
percent in the first two months of the year.
Even though hedge fund returns have trailed the broader
Standard & Poor's 500 in both January and February, their gains
so far this year still mark the strongest start to a calendar
year for the industry since 2000, HFR said.
But the good news is far from universal. New York-based
Paulson & Co, which oversees about $23 billion in assets, told
his clients that his Advantage Plus Fund dipped 1.5 percent last
month while the closely related Advantage Fund was off 0.8
percent in February, investors familiar with the returns said.
For Paulson, one of the industry's most closely watched
managers, this marks another embarrassment coming on the heels
of a 52 percent loss at the portfolio in 2011. Paulson did begin
the year with gains and despite February's loss the Advantage
Plus fund is still up 3.5 percent this year.
Last year stands in stark contrast to 2007 when a savvy bet
against the subprime industry which netted his firm triple digit
gains and him a record payout of more than $3 billion.
The Standard & Poor's 500 is up 7.2 percent through early
Some other prominent fund managers have fared well, however,
with David Einhorn's Greenlight Capital climbing 6 percent in
the first two months, for example.