Most US hedge funds lost out in Oct

Nov 08 2012, 15:56 IST
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SummaryHedge funds have gained only 4.3 percent on average this year.

50 percent last year, lost 3 percent and is now down 17 percent in 2012. But Paulson Enhanced, a fund that aims to make money on companies involved in mergers, climbed 1.46 percent in October, and is now up 10.8 percent for the year, the best performer in the billionaire investor's lineup.

His gold fund, which scored huge gains only a few years ago, tumbled 6.8 percent, and is now off 10 percent for the year. But his Credit fund rose 3.83 percent in October, and is up 6 percent for the year.

The Credit funds benefited primarily from gains in convertible securities, preferred equities and distressed debt, while the Recovery funds also rose from preferred equities as well as financials, according to an investor note sent with monthly results to investors.

Oct. 31 marked the redemption date for many of Paulson's funds, but a source familiar with the requests said they were roughly in line with historical averages, suggesting that investors had not rushed to pull money out despite some disappointing returns.

However, Paulson has had a share of setbacks this year when, for example, Citi Private Bank said it would pull out $410 million. More recently, New York's 92nd Street Y, which had a sweetheart deal where Paulson guaranteed any loss, pulled their money out when the group decided to move out of hedge funds.

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