John Paulson’s PFR Gold fund fell 65 percent this year

John PaulsonPFR Gold, the hedge fund with investments in gold managed by billionaire John Paulson, recorded in the first six months of the year a loss of 65%. The fund’s value lost approximately $600 million, according to Reuters, citing two sources close to the fund.

Paulson is among the five richest fund managers in the world after Carl Icahn, George Soros, James Simons and Ray Dalio, with a fortune estimated by Forbes at $11.2 billion.

The gold price in June recorded a decline of 12%, which caused a decrease of fund assets managed by Paulson in the same month by 23%. A possible explanation is the fact that the billionaire uses derivative works based on borrowing money to invest in gold. The markets were down after Ben Bernanke’s announcement that the Federal Reserve might reduce the bond purchases that were a catalyst for constant gains of global financial markets.

In the first six months of this year the price of gold fell by 27% to approximately $1,226 / ounce. Today an ounce of gold was trading at $1,247, up 1.1% from the previous day.

Paulson, who became known after making in 2007 about $15 billion betting on the housing bubble burst in the U.S., recently told investors not to make a big fuss of the fall of the gold fund with assets representing about 2% of the total assets managed by the management company headed by Paulson, Paulson & Co, which totals about $19 billion. The other funds managed by Paulson were profitable so far this year.

However, after making big money in 2007, Paulson has lost a fortune in client money, as the funds managed by him received blow after blow. For example, in 2011 the value of assets under his management stood at $38 billion, double their value today. Paulson is expecting for the U.S. economy to pick up and European economies to worsen, which would make gold stocks rise again.

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