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Originally published Saturday, August 9, 2014 at 8:00 PM

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Source: Paulson’s hedge funds fell in July as stocks slumped

Stocks have been weighed down by concerns that the improving economy may force the Federal Reserve to raise interest rates sooner than expected, among other things.


Bloomberg News

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John Paulson, whose namesake hedge-fund firm oversees $22.8 billion, posted losses in his main strategies last month as stocks fell and concern grew that credit markets will deteriorate.

The firm’s Paulson Partners, which bets on companies involved in takeovers, fell 1.3 percent, pulled down by positions in health-care and telecommunications sectors, said a person familiar with the matter.

That pared yearly gains to 5.1 percent. Its Credit Opportunities fund declined 1.4 percent on losses in convertible bonds and post-reorganization equities, cutting gains in 2014 to 7.5 percent, said the person, who asked not to be identified because the information is private.

Stocks have also been weighed down by concerns that the improving economy may force the Federal Reserve to raise interest rates sooner than expected.

Last month’s losses mean Paulson’s event-driven Advantage funds and Recovery fund are down for the year. The Advantage Plus fund, a levered strategy that bets on companies going through spinoffs, restructurings or bankruptcies, plunged 5.3 percent in July and 3 percent this year, the person said.

The unlevered Advantage fund decreased 4.4 percent last month and 4.1 percent this year. The Paulson Recovery fund slumped 4.9 percent in July after losses in the insurance and banking sectors, the person said.

Armel Leslie, a spokesman for Paulson & Co. with WalekPeppercomm, declined to comment on the returns.



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