(Reuters) - Hedge fund manager John Paulson lost more than half of the capital in one of his firm's biggest funds, people familiar with the number said Friday. His Advantage Plus fund, which was the firm's worst performer through 2011, ended the year down roughly 52 percent. In 2010 that portfolio ended up 17 percent.
The Advantage Fund, which is the unlevered version of the Advantage Plus Fund, dropped 36 percent after an 11 percent gain in 2010.
"This will certainly go down as one of the largest losses in terms of dollars and percent in the history of hedge funds," said Bradley Alford, chief investment officer at Alpha Capital Management, which invests client money with Paulson. "When you see John Paulson cut you in half in a matter of months, after 17 years of stellar performance, you have to wonder the risk that hedge funds take to attempt to stand out in crowd of 10,000+ others."
Paulson's other offerings didn't fare much better. His Credit Opportunities fund lost 18 percent in 2011. Even Paulson's Recovery Fund, a relatively small portfolio which had fared well during the early part of the year, slumped 28 percent, another person familiar with the Paulson numbers said.
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The Advantage Fund, which is the unlevered version of the Advantage Plus Fund, dropped 36 percent after an 11 percent gain in 2010.
"This will certainly go down as one of the largest losses in terms of dollars and percent in the history of hedge funds," said Bradley Alford, chief investment officer at Alpha Capital Management, which invests client money with Paulson. "When you see John Paulson cut you in half in a matter of months, after 17 years of stellar performance, you have to wonder the risk that hedge funds take to attempt to stand out in crowd of 10,000+ others."
Paulson's other offerings didn't fare much better. His Credit Opportunities fund lost 18 percent in 2011. Even Paulson's Recovery Fund, a relatively small portfolio which had fared well during the early part of the year, slumped 28 percent, another person familiar with the Paulson numbers said.
Continue reading.
