John Paulson, the billionaire money manager who had his worst year on record in 2011, posted a 5 percent gain in January in one of his largest hedge funds as all strategies rose, according to a person briefed on the returns.
Paulson & Co., which is based in New York and manages about $24 billion, lost money in what he called an “aberrational year” on investments including Citigroup Inc., Bank of America Corp. and Sino-Forest Corp., the Chinese forestry company accused by short-seller Carson Block of overstating timberland holdings. Paulson’s Advantage Plus Fund had a 51 percent loss in 2011.
The gold share class of the Advantage Plus Fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, increased 7.4 percent in January. Paulson investors can choose between dollar-and gold-denominated versions for most of the firm’s funds.
Paulson’s Gold Fund, which can buy derivatives and other gold-related investments, jumped 13 percent in January, said the person, who asked not to be identified because the information is private. Paulson’s bullion-related investments worked in the first part of last year until the metal slumped 14 percent in the final four months of 2011.
Armel Leslie, a spokesman for Paulson, declined to comment on the firm’s returns. Some returns were reported earlier today by Business Insider’s Clusterstock website.
Gold surged 11 percent last month, the biggest January increase since 1983, as investors speculated that low rates in developed nations such as the U.S. and Canada will spur global growth.
Paulson, 56, has been betting on a U.S. economic recovery by the end of this year, which had led to losses in 2011 as the European sovereign-debt crisis roiled stock markets and spurred sharp price swings in equities. The Recovery Fund, which invests in assets Paulson believes will benefit from a long-term economic upturn, such as hotels, financial services and real estate companies, climbed 3.2 percent last month. Its gold shares gained 9.8 percent.
The Paulson Partners Enhanced Fund, which invests in the shares of merging companies, gained 4.1 percent in January and its gold share class jumped 10 percent. Paulson’s Credit Opportunities Fund returned 3.5 percent last month and its gold shares climbed 8.9 percent.
Paulson’s Advantage Fund, which employs a similar strategy to Advantage Plus, rose 4 percent in January. Its gold share class increased 9.5 percent.