July 21, 2018

The Greatest Hedge Fund Trader Ever is Down 34% This Year

John Paulson Hedge Fund Trader
Hedge fund King, John Paulson’s largest fund has taken a beating this year. Kelly Bit at Bloomberg reported that the fund’s assets have plummeted, according to a person familiar with the firm. http://bloom.bg/oCuHY9 Paulson is famous for betting big on the housing collapse in 2007. His funds racked up gains of up to 590% that year! In 2008, while the market dropped 38%, his fund was up 30%. The 2007 moves netted Paulson himself $4 billion that year. Gregory Zuckerman wrote a book on the events, called “The Greatest Trade Ever”. Well, the greatest hedge fund trader ever is down 34% this year.

“Paulson’s Advantage Plus Fund, which seeks to profit from corporate events such as takeovers and bankruptcies, lost 15 percent last month, said the people, who asked not to be identified because the fund is private. That compares with a 5.7 percent decline last month in the Standard & Poor’s 500 Index. The fund’s gold-denominated share class has lost 17 percent this year, after declining 7 percent in August.

Paulson, 55, whose New York-based firm Paulson & Co. manages $35 billion, has scaled back bullish bets after losses this year. He reduced his stake in Bank of America Corp. (BAC) to 60.4 million shares as of June 30 from 124 million shares on March 31. The bank’s shares have tumbled 44 percent so far this year.

The hedge-fund industry has gained 3.4 percent in 2011 after falling 1.1 percent last month, according to the Bloomberg aggregate hedge-fund index. Paulson would have to return about 52 percent in the remainder of the year to break even in the Advantage Plus Fund.

Paulson lost 11 percent last year through August with his $9 billion flagship fund before posting profits by the end of the year and making about $5 billion personally.”

Thank God for management fees. Bright spots for the firm include heavy bets on gold. It’s gold fund is up 21% year to date. While the greatest hedge fund manager is down 34% this year, clients and observers should stick with Paulson. To quote “Some Like It Hot”, “Nobody’s perfect.”

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