Continuing Growth of Paulson & Co. Raises Concerns

March 29th, 2010
| More
John Paulson’s hedge fund Paulson & Co. with $32 billion under management is the third largest in the world after JP Morgan Chase & Co. and Bridgewater Associates LP. Paulson is different from many of its competitors because it makes concentrated bets and continues to add new cash, causing concern about being too large.

According to a recent Bloomberg article, growing funds may have more difficulty in seeking out investments large enough for positive returns and for trading at proper prices. Paulson’s $19 billion Advantage funds exploit bankruptcies, distressed debt, and mergers but have been returning less than similar funds in 2010 after topping them in 2007 and 2008. While similar funds returned an average of 6.6% in 2007 and lost 22% in 2008, Paulson’s bet against subprime mortgages led to a 160% return in 2007 and a 37% return in 2008 from The Advantage Plus fund. However in 2009, this fund only returned 21% while competing funds returned 25%.

Soros Fund Management LLC and Tiger Global Management were the only hedge funds with over $20 billion under management in 1998 and both stopped managing external investors’ assets by 2000 after major losses. Chris Shumway’s stock hedge fund, Shumway Capital Partners, has been closed to new money since it reached $8 billion while credit fund King Street Capital Management LP announced that growth will be regulated now after exceeding $20 billion.
See Source
For Detailed Investor Profiles on these Investors, click below:
Paulson & Co.
Soros Fund Management
Tiger Global Management
Shumway Capital Partners
Bridgewater Associates LP
King Street Capital Management
Related People: Andrew Hoine; Andy Burdick; Brian Higgins ; Chase Coleman; Chris Shumway; Feroz Dewan; George Soros; Jeff Eberwein; John Paulson; Julian Robertson; Keith Anderson*; Mena Gerowin*; Mike Barr; Neeraj Chandra; O. Francis Biondi; Ray Dalio; Robert Donald; Robert Soros; Scott Bessent; Sheru Chowdhry; Stuart Merzer; Tom Wilcox; Zameer Arora
Related Entities: Bridgewater All Weather; Bridgewater Pure Alpha Fund II; King Street Capital LP; King Street Capital LP; King Street Capital Ltd; King Street Europe LP; King Street Institutional Ltd; Bridgewater Associates Pure Alpha Fund; King Street Advisors LLC; Paulson Advantage Master Ltd; Paulson Advantage Plus Master Ltd; Paulson Real Estate Recovery Fund; Paulson Recovery Fund; PCI; Pharos Financial Group (seeded) ; Quantum Emerging Growth Fund; Quantum Fund; Quantum Group of Funds; SCP Atlantic; SCP Ocean LP; SCP Sakonnet LP; Shumway Capital Partners LP; Shumway Capital Partners LTD; Shumway Capital Partners Sakonnet; Soros Capital LP; Soros European Equity Fund; Soros Quantum Endowment Fund; Tiger Global Funds; Tiger Management Corporation; Tiger Technology LP
Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News

More Recent Headlines

S&P Launches New ESG Index for Egyptian Stock Exchange

US Institutional Investors Turn To European Hedge Funds

Man Group discussing deals with SAC Capital and GLG Partners

Plainfield Asset Management forced out of Greenwich Offices - Will Max Holmes survive?

Moore Capital grabs Fortress Investment Group LLC’s Scott Lawin

King Street Capital Management Co-Founder Brian Higgins takes over Head of Trading role

Carl Icahn Resents his Corporate Raider Image

Moore Capital Management Trader Arrested on Insider Trading Allegations

Post-Crisis: Hedge Funds, Custodial Risk and Prime Brokers

Plainfield Asset Management Co-Founder Leaves while D.A. Investigation Ongoing