Mindich's Eton Park Leads Hedge Funds Joining John Paulson's Bet on Gold
Eric Mindich’s $13 billion Eton Park Capital Management LP led hedge funds in raising gold investments last quarter, joining billionaire John Paulson’s bet that bullion will increase amid inflation concerns.
Eton Park bought 6.58 million shares of SPDR Gold Shares, an exchange-traded fund that tracks the price of bullion, in the second quarter, according to a regulatory filing yesterday. The investment was valued at $800.3 million as of June 30, making it the hedge fund’s biggest holding. Leon Cooperman and Dmitri Balyasny also added shares of the gold fund, while George Soros and David Einhorn acquired shares in mining companies.
Hedge-fund managers have been investing in bullion and gold miners after the worst financial crisis since the Great Depression shook confidence in equities and currencies, and as increased government spending fanned speculation inflation may accelerate. Paulson, who offers clients investments denominated in gold, started putting money into the precious metal last year. Gold futures have gained 39 percent since the start of 2009 and reached a record on June 21.
Mindich, 42, is a former Goldman Sachs Group Inc. partner who began New York-based Eton Park in 2004 with $3.5 billion, one of the biggest start-ups in the industry. His fund also bought 780,000 American depositary receipts of South African gold miner Gold Fields Ltd. in the second quarter.
Brendan McManus, a spokesman for New York-based Eton Park, declined to comment on the filing.
Paulson Stays Put
Paulson, who oversees $31 billion at hedge-fund firm Paulson & Co., left most of his gold-related investments unchanged in the second quarter. He was the largest holder of the SPDR gold fund, with 31.5 million shares valued at $3.83 billion as of June 30, according to a separate filing with the U.S. Securities and Exchange Commission.
His firm owned 43.8 million depositary receipts of AngloGold Ashanti Ltd., his fourth-largest holding. The New York-based hedge fund is the Johannesburg-based miner’s biggest investor after buying a stake in the company last year.
Paulson owned 33.1 million shares in Kinross Gold Corp. and added to his stake Gold Fields Ltd. by buying 500,000 American depositary receipts, holding 24.1 million at the end of the second quarter.
SPDR Gold Shares accounted for the second-largest increase in investments by hedge funds in the second quarter. Hedge funds held 68.2 million shares of the ETF in the period, an increase of 10.2 million from the first quarter, according to filings.
Soros Adds Miners
Including other asset managers such as mutual funds, pension funds and insurance companies, the gold ETF recorded the third-largest increase in holdings, with investors buying 25.4 million shares, bringing total investments to 176.8 million shares. Newmont Mining Corp. and Barrick Gold Corp. were the sixth- and seventh-largest increase in holdings, according to filings. Goldcorp Inc. ranked eighth.
Soros Fund Management LLC bought 195,250 shares in Newmont Mining, its second-largest new investment in the quarter, according to a filing. The New York-based fund also added to its stakes in Barrick Gold, Gold Fields and Kinross Gold Corp.
Billionaire Soros cut its holdings in SPDR Gold Shares, its biggest position. The firm sold 341,250 shares in the second quarter, leaving it with 5.24 million shares, according to a filing. It also cut its stake in NovaGold Resources Inc.
Omega Advisors Inc., the New York-based hedge fund run by Cooperman, bought 542,000 shares of SPDR Gold Shares in the second quarter, according to a filing. Balyasny Asset Management LP, a Chicago-based hedge-fund firm, bought 320,000 shares of the gold exchange-traded fund, making it its second-largest holding in the period.
Balyasny also bought 150,000 shares of Vancouver-based Goldcorp. in the second quarter, 101,900 shares in Royal Gold Inc., and 300,000 Gold Fields ADRs, according to a filing.
The SEC requires money managers who oversee more than $100 million in U.S. equities to report their holdings on a Form 13F within 45 days of the end of each quarter. The filing must include all holdings in stocks that trade on U.S. exchanges, as well as options and convertible debt.
Einhorn, who runs Greenlight Capital Inc., bought shares of African Barrick Gold Ltd. during the second quarter. The London- based company, which mines for the precious metal in Tanzania, was spun off from Barrick Gold Corp. in March in a 581 million pound ($909 million) initial public offering.
“We think ABG is cheaper than all the other gold miners,” Einhorn said at a conference in May. “ABG management incentives are well aligned with stockholders.”
Einhorn, whose firm is based in New York, cut his stake in the Market Vectors Gold Miners exchange-traded fund by 616,630 shares to 2.58 million shares in the second quarter, according to a filing.