John Paulson took a giant step last year toward recovering
from his recent woes.
While many Paulsonophiles have been focusing on the
continuing losses of the Advantage funds, the other three major
funds managed by Paulson & Co. posted gains last year.
Credit Opportunity, which now accounts for the largest
portion of Paulson assets, was up 9.1 percent in 2012. The gold
share class rose 10.8 percent.
Recovery Fund was up 4.1 percent and the gold shares were up
The best performers were the merger arbitrage funds. Paulson
Partners L.P. was up 9.9 percent while Paulson
Enhanced—which has double the weighting due to
leverage—surged 20 percent, the same as the gold
These three groups of funds—Credit, Recovery and
merger portfolios—now account for more than 65 percent
of the firm’s assets, which are down to $19
billion from a high of nearly $36 billion two years ago.
As for the losing funds, Advantage finished the year down 14
percent while Advantage Plus lost 19 percent.
Even so, the weighted average performance of all of the
firm’s funds was a positive 1 percent.
The firm would not comment on these results.
Paulson, of course, became a hedge fund household name when
his personal earnings topped $3.7 billion in 2007 after
successfully betting against the housing market. He personally
lost around $3 billion in 2011 when many of his funds lost
between 20 percent and 50 percent.
Paulson continues to have a big bet on gold. In the third
quarter, he raised his stake in an exchange-traded fund that
tracks the price of gold to $3.7 billion. His third largest
holding was gold producer Anglogold, of which he is the largest
Last year, Paulson and his family Foundation announced they
are donating $100 million to the Central Park Conservancy.
Follow Stephen Taub on Twitter @stephentaub