John Paulson, the billionaire manager having the worst year of his career, rebounded 2.4 percent in his main hedge fund in October and gained in all his strategies, according to a client update obtained by Bloomberg News.
Paulson’s main fund, the Advantage Plus Fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, reduced its year-to-date loss to 44 percent. The gold share class advanced 3.3 percent last month and declined 27 percent this year.
Paulson, 55, posted positive returns in all of his funds in October as stocks rallied. The Standard & Poor’s 500 Index of large U.S. companies jumped 11 percent last month on higher- than-estimated earnings and optimism that European leaders would take steps to contain the region’s debt crisis.
Paulson & Co., which is based in New York and manages $30 billion, has been betting on an economic recovery by the end of 2012 and lost money this year on investments including Citigroup Inc., Bank of America Corp. and Sino-Forest Corp. (TRE)
Paulson’s dollar-denominated Advantage Fund, which employs a similar strategy to Advantage Plus, gained 4.7 percent last month and fell 29 percent this year. The gold share class rose 8.3 percent in October and declined 12 percent in 2011.
Investors can choose between dollar- and gold-denominated versions for most of Paulson & Co.’s funds.
The Recovery Fund, which invests in assets Paulson believes will benefit from a long-term economic upturn, advanced 10 percent in October and slumped 25 percent this year. The gold- share class gained 13 percent last month and declined 11 percent in 2011.
Paulson’s Gold Fund, which can buy derivatives and other gold-related investments, climbed 8.3 percent in October and 9.4 percent this year.
The Paulson Partners Enhanced Fund, which invests in the shares of merging companies, increased 3.3 percent last month and fell 17 percent in 2011. The gold share class jumped 7.3 percent in October, paring its decline this year to 1.6 percent.
Paulson’s Credit Opportunities Fund rose 4.9 percent last month and dropped 15 percent in 2011. Its gold shares advanced 7.5 percent in October and 2 percent this year.
The firm received less than 8 percent in year-end redemption requests for all funds, according to a memorandum sent to investors this week, which means withdrawal orders total about $2.4 billion. Redemption requests were due at the end of October.
Clients were permitted to pull a maximum of 25 percent of assets, or about $7.5 billion, according to a person briefed on the matter. Paulson and his employees account for about half of the firm’s capital, two people familiar with the matter said last month.
Armel Leslie, a spokesman for the firm, declined to comment on the returns.
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