Billionaire Paulson Caught on Wrong Side of Gold Rout


Hedge fund billionaire John Paulson is one of the biggest losers in this year's gold rout, with his gold fund of under $1 billion losing 27%in April alone, according to performance figures provided by a source familiar with the fund.

The jarring one-month decline in the Paulson gold fund, brings the year-to-date loss for the fund to about 47%, the person familiar with the fund said.

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The April selloff in gold was particularly fierce and came as a surprise to many hedge fund managers who were long either gold bullion or the SPDR Gold Trust, the most popular gold exchange-traded fund.

Hedge fund manager David Einhorn said on a conference call Tuesday for his reinsurance company Greenlight Capital Re, "We were somewhat surprised by the swift decline in the price of gold in April."

The majority of the money invested in the gold fund is believed to be Paulson's, who rose to hedge fund fame for making billions betting against the housing market on the eve of the financial crisis. But since then, he has struggled to duplicate that success and his portfolio of funds generally have struggled in recent years.

Paulson disclosed the loss to investors on Monday along with results for his other funds.

Paulson's more widely held Advantage fund declined 0.8% in April largely because of its gold positions. The fund is up 2.5%through April, the source said.

The Advantage fund and a leveraged version of it were once two of Paulson's most popular funds but now has under $5 billion in assets.

The average hedge fund is up a little over 3% this year.

Assets at his firm have dropped to $18 billion, down from $38 billion in early 2011 due to redemptions and poor performance.

Two other funds managed by Paulson are performing well this year. His credit focused fund is up 11.9 percent for the year and the Paulson Recovery fund is up 21.8% this year.