Investors ask hedge fund titan to cut his gold positions in half or they take their money out
Investors with John Paulson aren’t impressed with his gold metal performance.
They are upset over Paulson’s huge gold positions — specifically, his outsize holding of AngloGold Ashanti, down 20 percent this year.
That has dragged down two of Paulson’s funds.
“I would be happier if he cut the gold position in half,” says one investor who put in a notice to take his money out of the fund in June. “He would have been up 4 percent in the first quarter if it weren’t for the goddamned gold.”
Instead, Paulson’s gold-heavy funds — Paulson Advantage and Paulson Advantage Plus — are down in the high single digits.
Gold bets account for 25 percent of the portfolio in Paulson’s Advantage funds, which are in the red again this year — after tanking in 2011. The concentration is even worrying some Paulson insiders, a source told The Post.
The two funds manage about $8.5 billion, or one-third of the firm’s capital. About half of the firm’s capital is from outside investors.
Paulson made the history books with his 2007 subprime short that turned him into an overnight sensation. Investors in his funds were amply rewarded — and the hoi polloi jumped aboard.
Last year’s big losses tested their resolve but by and large, these investors stuck with Paulson.
Through the first quarter, Paulson has told investors that redemptions were just 2 percent of the firm’s $24 billion of capital. The same amount is expected to come out this quarter, says a source close to the firm.
But industry insiders reckon that Paulson’s inability to turn these two funds around this year could lead many more investors to throw in the towel. One more problem: a reliance on bank platforms.
After his fame rose, Paulson began raising billions of dollars through bank hedge-fund platforms, which allow individuals to avoid the $10 million minimum investment to get into a Paulson’s hedge fund. Who is John Paulson ?
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