The hedge fund manager of subprime fame earning US$4 billion during the financial crisis for his accurate bet against subprime mortgages – has performed poorly lately. Recent news suggests Paulson & Co have been inundated with redeeming calls from frustrated investors. Institutional Investor’s Alpha reports that its Paulson Gold fund is down close to four percent for the year and Paulson Advantage fund is performing extremely poorly with a negative 14 percent return in 2012. This comes on the backdrop of the S&P 500 rising 16 percent for the first nine months of the year.
In the third quarter, Paulson & Co initiated eight new positions worth a total of US$840 million. Amongst the largest are 23.8 million shares of Metro PCS [PCS] for US$278 million, 6.1 million shares of Canadian takeover target Nexen Inc [NXY] for US$153 million and 1.37 million shares of Shire PLC [SHPG] for US$122 million. Here is a chart of how they are doing against the S&P 500:
Furthermore, the hedge fund also bought an additional 8.5 million shares in Life Technologies [LIFE] to take its total stake in the company to 13.5 million shares. It also boosted its stake in Grifols SA [GRFS] by 5.2 million shares to a total of 16.4 million shares; and doubled its stake in Equinix Inc [EQIX] by 1.1 million shares to a total of 2.1 million shares. Here is a chart of how they are doing against the S&P 500:In contrast, John Paulson further cut his stake in Hartford Financial Services [HIG] — selling 11.8 million shares in the third quarter with 19 million shares remaining in the insurance and financial services company. The hedge fund also eliminated its entire stake in Goodrich Corp [GR], Baxter International [BAX], JP Morgan Chase [JPM] and Quest Software [QSFT]. Here is a list of the top ten positions Paulson & Co holds as of the latest quarter, sorted by market value:
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