›  News 

John Paulson manages to recover and is expected to earn $800 million!

Late gains let Paulson manages to save 2010 performances, two years after his winning bet that the U.S. housing market would crumble.

Article also available in : English EN | français FR

Going against those who believed his success during the subprime crisis was a onetime gain, John Paulson cements his reputation and seems to hit again the jackpot in 2010

However, the path of 2010 has been stressful for John Paulson ... He had taken large stakes in companies likely to benefit from strong economic recovery, especially within the banking sector and financial services.

Through september his flagship fund Advantage fund had been down 11 percent. In less than three months, Advantage Fund turned a double-digit loss in a double-digit gain. According to an investor, the $9 billion fund (early 2010 figures) was up 14 percent mid-December.

During the summer, critics poured in from all sides. Some investors wanted to redeem and others whispered that assets under management were actually "too big" to be managed successfully. Patience paid off! Many Paulson’s bets have started delivering positive returns only in the last quarter.

Paulson has purchased 43 million shares of the gaming company MGM, whose stock price jumped more than 30 percent since the end of September. He also bet $40 million on cable giant Comcast which has climbed 22 percent in the last quarter

Stock prices of Boston Scientific, of which Paulson owns 80 million shares, rose 26 percent and Paulson’s 44 million shares of Hartford Financial Services posted 16 percent in the last quarter ..

One of Paulson’s investments, a stake in Anadarko Petroleum, climbed 20 percent during the quarter.

Moreover, his new fund, dedicated to gold, on which he took a huge position has gained 30 percent in 2010.

John Paulson builds his path out of what may be called a mixed year for many hedge fund managers. Through november, the average of funds net of management fees returns, was 7.1 percent, according to a composite index followed by Hedge Fund Research in Chicago, compared to a 7.8 percent gain of the S&P 500 index. With such performances, John Paulson should earn at least $ 800 million.

Other big names of hedge funds insdustry have also achieved good results. The flagship fund of SAC Capital Advisors, run by Steven A. Cohen, gained 13 percent, according to one of its investors.

And after two consecutive years of losses on funds available to external investors, the lights are back to green for Renaissance and James Simons, the guru of quant funds. His two funds have gained 17 percent and now manages $ 7 billion

Next Finance , January 2011

Article also available in : English EN | français FR

Share
Send by email Email
Viadeo Viadeo

Focus

News Institutional investor appetite is back for quant funds

The recent CTA performances encourage institutional investors to more closely monitor this type of hedge fund. Thus, according to Preqin, 52% of them wish to increase their exposure to this type of alternative strategy this year (vs 14% last (...)

© Next Finance 2006 - 2019 - All rights reserved