Last Minute Surge In Financials Puts Paulson's Key Funds In The Green For The Year, Gold Fund Is Best Performer

Tyler Durden's picture

After Paulson & Co. was underperforming the market substantially in the middle of 2010, with it Advantage and Recovery funds decidedly negative through Q3, the last minute push in the market to get financials green through the end of 2010 at all costs (literally, now that we know that Fannie, and its "recused" GC Tim Mayopoulos, is sacrificing a few trillion extra in taxpayer capital just to bail out such insolvent mortgage lenders as BofA), resulted in a strong close to the year for man who made billions on Paolo Pellegrini's ideas (and Goldman's client "dedication"). Then again, not very surprisingly, the best performing strategy in Paulson's barbell bet on inflation: the Paulson's Gold fund, which ended the year up about 35%. What will be interesting is finding just how much of BofA Paulson has left at the end of Q3, and whether he has given up on his price target of $30 for the bank which was supposed to be achieved by the end of 2011. Stay tuned on February 15 to find out...

From Market Watch:

Paulson & Co. generated big returns in December as bullish bets on
an economic recovery paid off, helping turn around what had been a tough
period for the giant hedge-fund firm earlier in the year. Paulson
Advantage, one of the firm's main hedge funds, returned about 9% in
December, leaving it up 11% for the year, according to a recent update
sent to investors. Paulson Advantage Plus, which uses the same strategy
but adds a small layer of leverage, was up 13% last month and ended 2010
with a gain of 17%. Paulson Recovery, which invests in
financial-services companies that need to rebuild capital, jumped 14% in
December, leaving it up 24% in 2010. Paulson Enhanced, a merger
arbitrage fund, gained 11% in December and ended last year with a 27%
gain. Gold share classes of the firm's funds returned more as gold
prices climbed last year. The gold share class of Paulson Advantage
returned 31% in 2010. Paulson's Gold fund, climbed 1.4% in December and
ended the year up about 35%.