BOSTON (TheStreet) -- Paulson & Co. founder John Paulson, who earned a record amount last year with the help of gold and bank investments, is now counting on Transocean (RIG) - Get Transocean Ltd. Report and BlackRock (BLK) - Get BlackRock, Inc. Report to keep profits rolling.
gained notoriety for his big bets on gold and bank stocks such as
, which netted him a personal profit of $5 billion in 2010, the largest one-year gain in investing history.
Paulson and his hedge fund
came under fire after the
Securities and Exchange Commission
in April filed civil charges against Goldman Sachs, alleging that the investment bank committed fraud by deceiving investors on subprime mortgage-backed securities.
The SEC alleged that Paulson & Co., one of the world's largest hedge funds, paid Goldman to structure a transaction in which Paulson's firm could take short positions against residential mortgage-based securities (RMBS) chosen by none other than Paulson & Co., which presumably would pick RMBS that it thought would experience negative credit events.
Those allegations haven't stopped the hedge fund from outperforming. The value of Paulson & Co's equity portfolio rose to $29.3 billion from $22.9 billion at the end of the third quarter, according to the fund's latest filing with the SEC. Hedge funds that manage more than $100 million are required to disclose their equity holdings, options and convertible debt on a Form 13F filed to the SEC within 45 days of the end of a quarter. Funds aren't required to report short positions betting on declines.
Paulson was still high on bank stocks in the fourth quarter, adding to the fund's position in Wells Fargo and Citigroup, and he also increased his bet on gold by adding more shares of the
SPDR Gold Trust
. Paulson & Co. also dumped entire positions in 12 companies, including
General Growth Properties
Perhaps most interesting to investors are Paulson's newly initiated positions, which could be the foundation for another year's worth of record profits. Overall, Paulson added 25 new holdings to the fund's portfolio last quarter, including small stakes in
Other new holdings, though, have market values that easily exceed $200 million, making them among Paulson's biggest and newest bets heading into 2011. The following pages detail Paulson & Co.'s 10 biggest new positions in the fourth quarter, ranked by market value as of Dec. 31.
: GenOn Energy is an independent power producer that generates and wholesales electricity. It sells electricity to investor-owned utilities, municipalities, cooperatives and other companies that serve end users or purchase power at wholesale for resale.
: The hedge fund bought 51.6 million shares of GenOn in the fourth quarter, good for a market value of $196.6 million as of Dec. 31.
: Teva Pharmaceutical is a global pharmaceutical company that develops, produces and markets generic drugs covering all major treatment categories.
: The fund's position in Teva had a market value of $232 million at the end of the fourth quarter, as Paulson & Co. picked up nearly 4.5 million shares of the pharmaceutical company.
: Baxter International is a health-care company that develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease and trauma.
: Paulson & Co. acquired an even 5 million shares of Baxter International in the fourth quarter. The position had a market value of $253.1 million as of Dec. 31.
J. Crew Group
: J. Crew is an apparel retailer that offers women's, men's and children's apparel and accessories, including wedding and special occasion attire, weekend clothes, swimwear, loungewear, outerwear, shoes, bags, belts, hair accessories and jewelry.
J.Crew received a buyout offer of $3 billion from TPG Capital and Leonard Green, and last month
were looking to launch rival bids, according to a
: The fund bought 6 million shares of J. Crew last quarter, equal to a market value of $258 million as of Dec. 31.
: CommScope is a provider of infrastructure services for communication networks, offering radio frequency subsystem solutions for wireless networks.
: Paulson & Co. snatched up 9 million shares of CommScope in the fourth quarter. The investment had a market value of $281 million as of Dec. 31.
: King Pharmaceuticals is a pharmaceutical company that performs basic research and develops, manufactures, markets and sells branded prescription pharmaceutical products and animal-health products.
: The hedge fund nabbed 20 million shares of King Pharmaceuticals last quarter, worth $281 million as of Dec. 31.
: Whirlpool makes a full line of appliances and related products for home use. It makes washers, dryers, refrigerators, air conditioners, dishwashers, freezers, microwave ovens, ranges, trash compactors and air purifiers.
: Paulson & Co. made a big bet on Whirlpool, picking up nearly 3.5 million shares with a market value of $309.4 million as of Dec. 31.
: Medtronic provides innovative products and therapies for use by medical professionals to meet the healthcare needs of their patients.
: The hedge fund bought more than 9.1 million shares of Medtronic in the fourth quarter. The position had a market value of $338.7 million as of Dec. 31.
: BlackRock provides investment-management services to institutional clients and to individual investors through various investment vehicles.
: Paulson & Co. acquired 2 million shares of BlackRock in the final three months of 2010, an investment that had a market value of $381.1 million as of Dec. 31.
: Transocean is an international provider of offshore contract drilling services for oil and gas wells. Its two reportable segments are: contract drilling services and other operations.
: The hedge fund's largest new position had a market value of $500 million at the end of the fourth quarter, after Paulson & Co. bought 7.2 million shares of the offshore drilling company. Despite the big purchase, Transocean still doesn't rank in the portfolio's top 10 holdings based on market value, instead coming in at the 14th spot.
-- Written by Robert Holmes in Boston
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