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Paulson loses more money in Advantage funds

July 10, 2012 at 03:04 pm EDT

MarketScreener.com By The editorial team

Paulson loses more money in Advantage funds

NEW YORK (Reuters) - An already very bad year is now looking even worse for hedge fund industry titan John Paulson.

During the first six months of 2012, Paulson's Advantage Plus fund lost 18 percent, pushed lower by an 8 percent tumble in June. The portfolio's sister fund, the Advantage Fund, fell 5.7 percent in June and is now off 11.6 percent for the year.

The firm's gold fund was off slightly in June and is now down 23 percent for the year. Losses in June also took a chunk out of his better-performing funds including the Credit fund which is now up 2.2 percent for the year. The Recovery fund is up 3.5 percent for the year while the Partners fund is up 2.5 percent for the year.

Paulson, who has been one of the $2 trillion hedge fund industry's most-watched investors, broke the bad news to his wealthy clients earlier on Tuesday.

These fresh losses offer new evidence that the much hoped-for turnaround at one of Paulson's biggest portfolios is nowhere in sight. The numbers also seem to be a repeat of last year when the Advantage Plus fund was off 18 percent before going on to lose more than 50 percent for full-year 2011.

Most of the losses were driven by the fact that Paulson's very dim view on Europe proved to be wrong last month.

A spokesman for the firm declined to comment.

(Reporting by Svea Herbst-Bayliss; editing by Matthew Lewis)

John Paulson

John Paulson is the boss of the investment fund Paulson & Co. founded in 1995. It’s thanks to subprime crisis that he is become famous. Ranked from Trader monthly magazine best trader of the world in 2008, he became a safe value for investment advice. With a fortune amounted to $ 16 billion in 2011, he was ranked as 36th richest people in the world. Today, with $ 36 billion in assets under management, his fund is the third largest global hedge fund.

John Paulson was recognized for his ability to anticipate the market movements. Graduated from Harvard and with an experience in Bear Sterns Investment Bank, he speculated on the housing bubble’s burst and subprime mortgages’ collapse. He created four hedge fund with only one goal: to cover the default risk of these mortgages. One of these funds, the Credit Opportunities opened in early 2007 with $ 130 million, in 12 months was valued at $ 3,2 billion.

John Paulson funds’ assets are valuated at $ 29 billion. His flagship fund, the Paulson Credit, posted a performance of 590% in 2007. Also in 2007, one of his funds invested in agriculture commodities has collected earnings for $ 3,7 billion, another record for the investor who was called by the media “The Sultan subprime”.

John Paulson has hired Alan Greenspan, old Fed’s Chairman.

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