John Paulson, the billionaire hedge-fund manager seeking to rebound from losses tied to bullion, posted a 23 percent decline in his PFR Gold Fund last month, according to a letter to investors.
The drop brings the loss to 65 percent since the start of the year, the firm said in the July 3 letter, a copy of which was obtained by Bloomberg News. The fund, with about $300 million in assets, consists mostly of Paulson’s own money and is the smallest at the firm, which manages $19 billion. Paulson’s other funds are profitable this year.
The New York-based firm reiterated its commitment to investing in bullion and stocks of gold producers for protection against currency debasement as central banks pump money into the global economy. Gold dropped 12 percent in June, the most since October 2008, after Federal Reserve Chairman Ben S. Bernanke said he may start reducing bond purchases that have fueled gains in financial markets globally.
“Although the timing is uncertain, if you have a long-term view we believe the funds offer the potential for outsized returns,” the firm wrote in the letter.
Armel Leslie, a spokesman for Paulson & Co. at Walek & Associates, declined to comment on the letter.
The firm posted losses in its four main funds in June as markets slumped on the Federal Reserve’s warning that it may phase out stimulus. Those funds have all posted gains for the year in the dollar share class. Investors can choose between dollar- and gold-denominated share classes of most of Paulson’s funds.
The firm said last month it would report returns separately in the PFR Gold Funds, which takes its name from the initials of Paulson and gold specialists Victor Flores and John Reade. It was previously called the Paulson Gold Fund.
Paulson, 57, made $15 billion for his investors in 2007 by betting against subprime mortgages before the housing collapse. He’s seeking to continue a rebound from money-losing bets he made in 2011 and 2012, including that the U.S. economy would pick up, the European debt crisis would worsen and that bullion and gold stocks would rise.