John Paulson

Some quant funds are faring well

Jim Kim — Wed, 19 Nov 2008 11:16:17 -0500

So how are hedge funds faring really? Well, they're on track to post their worst annual performance figures since people started keeping score. But they've held up far better than mutual funds and the Standard & Poor's 500 index. Still, it's a tough time and many expect some massive upheaval. So any fund scoring big gains this year deserves a lot of credit (not to be clever). John Paulson has gotten the most attention for posting positive returns. But FINalternatives notes there are some others, many of which happen to be quant funds. Hyman Beck & Co., for example, posted a roughly 16 percent gain in October, which brings its year-to-date gain to 47 percent. John W. Henry & Co. runs four funds which are up between 30 percent and 72 percent. These funds tend to be really small, but a good run is a good run--their investors are not complaining.

For more:
- here's the FINalternatives article

Can John Paulson keep it up?

Jim Kim — Wed, 29 Oct 2008 12:42:35 -0400

Hedge funds are faring poorly these days. By several metrics, the industry is on its way to one of the worst annual performances since these funds were invented. But the one guy that keeps being mentioned as the exception to the gloom is John Paulson, of Paulson & Co. (no relation to Henry, we're pretty sure) While funds, on average, are down for the year, Paulson's six funds are up between 5 and 25 percent, reports the New York Post. Apparently, he avoided the energy debacle and has been shorting banks (it's unclear how the ban affected him). Now, he's apparently wading into a few energy stocks. Nowadays, it's hard to string together consecutive stellar years.

For more:
- here's the article

Hedge fund losses continue in September

Jim Kim — Tue, 07 Oct 2008 13:28:19 -0400

The news is uniformly bad for many hedge funds right now. Sure, there are exceptions, like John Paulson's fund, which has been on a tear. But for most, the combination of short selling restrictions, a severe cutback in leverage ability, consternation about prime brokers, and newly empowered investors has made for a rough month. Oh yeah, performance has been awful. In fact, it's been the worst month in a decade, according to FINalternatives. A great example noted by the Financial Times: Citadel's main fund, which fell 15 percent in September, its worst month since 1994. But there are many others. In some ways, shifting trading rules are merely a convenient excuse. Hedge funds were supposed to do well in volatile conditions. For whatever reason, that's not happening now.

For more:
- here's the FT article
- here's the FINalternatives article

Related Articles:
Navigating the Hedge Fund Maze - September 2008

At least one hedge fund is thriving

Jim Kim — Mon, 06 Oct 2008 11:33:17 -0400

John Paulson rocketed to hedge fund fame and glory last year, when his prescient bets against anything subprime-related paid off in spades. He's having another good year, though it's doubtful he'll make another $3 billion. Through the end of August, Paulson's $7.4 billion Paulson Advantage Plus fund returned 19.43 percent, according to Reuters. He stands apart in several respects. For one thing, his big-name hedge fund manager peers are suffering through a really bad year. For another, he's one of the few big winners (most of whom won on credit-related bets) from last year to extend that into 2008. His latest surge seems to be the result of some short bets again British banks.

For more:
- here's the Reuters article

Weak funds being weeded out?

Jim Kim — Wed, 10 Sep 2008 21:22:25 -0400

We've noted that the game has really changed for hedge funds. Investors are calling more shots these days, and a general flight to quality seems to be underway. Minyanville weighs in with a piece that states it starkly: A weeding out process of weak funds is clearly underway. This process favors the big brands, of course. Indeed, even before this year, it seemed like big funds were slowly accounting for more of all industry assets. But even they cannot sit back and rest on their laurels, regardless of whether or not they've had a good year. They've got to innovate of course--look at John Paulson's credit fund--as well as cater to investors like never before. This goes way beyond cutting management fees. You've got to bend on lots of other things as well.

For more:
- here's the article

Related Articles:
Navigating the Hedge Fund Maze

Is the worst now over? John Paulson may think so

Jim Kim — Mon, 08 Sep 2008 07:51:59 -0400

The idea that we need a big failure to get past a financial crisis has long been out there. That's one reason a lot of people assumed that the Bear Stearns implosion signaled the worst was over. Of course they were wrong. Still, now you have to wonder whether the demise of Fannie and Freddie signals a nadir? No less that star hedge fund manager John Paulson is entertaining the idea. The Financial Times reports that he has informed clients that while he is still bearish, he will also consider long positions in various financial companies. Paulson will launch his Recovery fund next month. He will allow clients to switch money from hugely successful Credit Opportunities funds, which rang up gains of 590 and 352 percent last year. Paulson is known as the $1 billion man for his correct bet against subprime and other mortgage assets.

For more:
- here's the article

Credit crisis hits home for John Paulson painlessly

Jim Kim — Wed, 03 Sep 2008 17:27:53 -0400

Shed no tears for hedge fund manager John Paulson. He's the magic man right now. After his phenomenal 2007, during which his bets on the subprime collapse earned him more than a $1 billion, he has continued his winning ways in 2008. Except when it comes to South Hampton real estate. His 6,800-square-foot home languished on the market for four months at $19.5 million. Now Paulson is bowing to reality, cutting the price to $16.9 million, according to cityfile. Paulson bought it for $12.75 million in 2006. So if he can get a deal, he's still in the black. He apparently has purchased a nearby pad for $41.3 million.

For more:
- here's the item with pictures

Breakingviews awards gold medals in financial Olympics

Jim Kim — Mon, 11 Aug 2008 18:44:42 -0400

In honor of the summer Olympics, here are some medals that Breakingviews would like to see: A "shot put" medal for John Paulson: His big "put" on the subprime crisis made for a very good year. But how much longer can such puts work? How to play the bottom is vexing many. An "$8 billion backstroke" medal to John Thain: He's been doing some back-tracking as of late. A "poll vault" award to Jerry Yang: Turns out Yahoo's service provider miscounted the votes at the recent annual meeting. He received 66 percent of shareholder votes, not 85 percent. What are some medals that you would like to see?

For more:
- here's the Breakingviews article

The greatest short bets of all time

Jim Kim — Mon, 11 Aug 2008 10:06:29 -0400

When John Paulson, of Paulson & Co., bet against mortgage-backed collateralized debt obligations, he didn't hold back. His funds shorted the ABX and longed various credit default swaps--and it paid off. His $15 billion profit in 2007 is the stuff of legends. According to Business Week Online, it ranks up there with the greatest short bets of all time. George Soros is mentioned for his now legendary bet against the British pound just before it dropped out of a fixed exchange rate system. His $1 billion gain in 1992 gave him the title of "The Man Who Broke the Bank of England." Then there's Jim Chanos, the famous short, who bet correctly that Enron would collapse. Bill Ackman is noted for his big winning bet that MBIA' stock would tank.

For more:
- here's the package

Hedge funds line up behind Icahn on Yahoo

Thu, 22 May 2008 06:59:57 -0400

Yahoo may have been able to stare down Microsoft at the bargaining table, but we may yet see big M&A fees from a deal. The catalyst in all this remains Carl Icahn. Following his lead, an all-star cast of hedge funds managers have aligned themselves against Jerry Yang and Yahoo, which likely wasn't counting on this sort of shareholder response. T. Boone Pickens told the New York Post, "When I saw what he did, I jumped in behind him." Others include John Paulson, still basking in the glow of his stunning 2007 ($3 billion) and Dan Loeb of Third Point. The Post reports Farallon Capital Management, Appaloosa Management and Mason Capital Management are among those who have written Yahoo! board members to expressing their displeasure.

For more:
- here's the New York Post article