Paulson Merger Fund Said to Fall 0.9% as Credit GainsKelly Bit
Billionaire hedge-fund manager John Paulson posted a 0.9 percent decline in his Paulson Partners Enhanced fund last month as stock markets fell, according to a person briefed on the matter.
The loss reduces gains this year in the fund to 21 percent, according to the person, who asked not to be identified because the information is private. Paulson Partners Enhanced is the leveraged version of the firm’s merger-arbitrage strategy, Paulson’s largest fund group by assets.
Paulson & Co., based in New York with $18 billion in assets, posted gains last month in its event-driven Advantage and credit funds and a loss in its Recovery fund.
Paulson, 57 and known for making $15 billion for his investors in 2007 by betting against subprime mortgages before the housing collapse, is rebounding 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 wrote in a letter to investors last month.
Armel Leslie, a spokesman for Paulson & Co. with Walek & Associates, declined to comment on the returns.
Paulson’s Advantage Plus fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage, rose 2.6 percent in August amid gains in its gold mining, energy and healthcare holdings, bringing the return for this year to 15 percent, according to the person. The Advantage fund, a similar strategy, rose 1.9 percent last month and 10 percent this year.
The Paulson Credit Opportunities Fund increased 0.2 percent last month, bringing returns for 2013 to 14 percent, the person said. The Recovery Fund, the firm’s best-performing strategy in 2013, fell 1 percent in August, paring gains since the start of the year to 34 percent.
Gold, which has dragged down performance this year in Paulson’s PFR Gold Fund, rose 6.3 percent in August as mounting concern about military action in Syria drove prices toward bull market territory. Stocks of the metal producers gained 2 percent last month. Paulson & Co. said in June it would report the gold fund returns separately from its other strategies’ results.