Will Paulson & Co. Close Up Shop After 2011?
John Paulson has been spectacularly successful since 2007, making billions upon billions of dollars for himself and his investors.
After making a big splash in 2007 thanks to a very correct bet against the US subprime mortgage market, Paulson continued to roll in 2008, 2009 and 2010. The assets under management just poured in as investors pulled their money from other hedge funds and plowed them into Paulson's various offerings. Over the course of just a few years, Paulson managed to turn Paulson and Co. Inc. into one of the very largest hedge fund firms in the world.
No surprise that Paulson found himself under a very bright spotlight as he continued to post winning years. As a matter of fact, Paulson's new buys and sells probably received more attention than Warren Buffett's new buys and sells for a period of time.
Every year the general public awaited news of John Paulson's inevitable off year, and every year Paulson would turn in strong results.
At least until this year.
According to Absolutereturn-alpha.com, John Paulson's firm has been obliterated in 2011.
From their site, here are the YTD returns for some of Paulson's largest funds:
Paulson Advantage Plus Ltd., -46.73%
Paulson Advantage Plus LP, -45.34%
Paulson Advantage Ltd., -32.52%
Paulson Advantage LP, -32.38%
Paulson Enhanced Ltd., -21.92%
Paulson Partners Enhanced LP, -19.76%
Paulson International Ltd., -10.33%
Paulson Partners LP, -9.82%
It seems that Paulson has made practically every misstep possible in 2011, including taking large losses in Sino-Forest and Hewlett Packard. Paulson was surrounded by an aura of invincibility from 2007-2010, but in 2011 has looked very normal.
Even with the losses sustained in 2011, Paulson is still a billionaire a number of times over. Most of Paulson's net worth is still held within his hedge fund firm, so don't expect the firm to shutter its doors anytime soon.
Having said that, Paulson will be likely be faced with a flood of redemption requests after his horrific 2011.
After a spectacular multi-year run, the bloom is finally coming off of the John Paulson rose.
Source: Absolute Return + Alpha - Paulson down 46% in Advantage Plus fund after brutal September
Filed under: Hedge Fund News