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Paulson’s Main Fund Strategies Said to Extend 2013 Gains

Nov. 7 (Bloomberg) -- Hedge-fund manager John Paulson posted October gains in his main investment strategies as a stock market rally helped the billionaire extend this year’s rebound, according to a person briefed on the matter.

The Paulson Partners Enhanced Fund rose 0.3 percent on gains in telecommunications companies and mergers, bringing returns to 25 percent this year, said the person, who asked not to be identified because the information is private. The fund is the leveraged version of Paulson & Co.’s merger-arbitrage strategy, its largest by assets.

The firm, based in New York with $18 billion in assets, posted increases last month in its credit, event-driven Advantage and Recovery funds, the person said.

Paulson, 57, best known for making $15 billion for his investors in 2007 by betting against subprime mortgages before the housing collapse, is bouncing back from losses tied to gold and two years of wrong-way calls on the economy. More than 75 percent of Paulson & Co.’s capital has surpassed fund-level high-water marks, the firm told investors in August.

Armel Leslie, a spokesman for Paulson & Co. with WalekPeppercomm, declined to comment on the returns.

The Paulson Credit Opportunities Fund increased 1.8 percent last month from gains in defaulted securities and convertible bonds, bringing returns for 2013 to 17 percent, the person said. The Recovery Fund, the firm’s best-performing strategy in 2013, rose 4 percent in October from bets on insurance, asset-management and banking companies, bringing returns since the start of the year to 45 percent.

Advantage Plus

Paulson’s Advantage Plus fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage, rose 2.9 percent in October amid gains in energy, insurance and gold-mining companies, bringing the return for this year to 21 percent, according to the person. The Advantage fund, a similar strategy, rose 2 percent last month and 15 percent this year.

Gold stocks, which have dragged down performance this year in Paulson’s PFR Gold Fund, climbed 2.9 percent in October. Paulson & Co. said in June it would report the gold fund returns separately from its other strategies’ results.

To contact the reporter on this story: Kelly Bit in New York at kbit@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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