Investors that redeemed from Paulson & Co. remain interested in putting money into other funds managed by the firm. This may be because many customers took their capital out with a hefty gain, despite losses in the first eight months of this year. They had invested several years ago and hence benefitted from the outsized profits John Paulson made betting against mortgages.
You might want to reduce your exposure to certain strategies offered by Paulson while staying with his other strategies, says an investor. For instance, some clients like the Paulson Credit Opportunities but redeemed from Paulson Advantage fund. Others simply reduced the amount while keeping some investment in Paulson funds.
In the summer AR magazine reported that there were $2 billion of redemptions, in part because of fears about Paulson’s role in the Securities and Exchange mortgage derivative case against Goldman Sachs. But Paulson was not charged and Goldman settled the case.
This September markets started to go Mr. Paulson’s way and he made sizable profits.
The firm remains one of the best fund managers but some clients may have become too heavily exposed to Paulson, says the investor.
Tags: AR Magazine, John Paulson
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