Paulson fund hurt by sharp drop in gold | Reuters

Paulson fund hurt by sharp drop in gold
| Reuters

Paulson has long held firm to his view that inflation will eventually rebound, making gold a prudent hedge, but in the wake of the yellow metal's dramatic selloff, Paulson has lost significant amounts of money.
Still he is sticking with his plan. "The recent decline in gold prices has not changed our intermediate to long-term thesis," Paulson partner John Reade said earlier this week.
A Paulson spokesman would not comment on the midmonth numbers for the Advantage Fund.
For New York-based Paulson, the drop presents another black eye for a fund manager who has seen heavy losses on big investments, including Chinese forestry company Sino-Forest Corp and Bank of America Corp. In 2011, the Advantage Fund's sister fund, Advantage Plus, lost more than half of its value.
The Advantage Fund's performance this year - up just 1.3 percent - also leaves Paulson near the bottom of the rankings. While some hedge fund managers, including Nelson Peltz whose Trian Fund gained 12.4 percent during the first quarter, are reporting double digit numbers, most were up only 3 percent in the first quarter. The Standard & Poor's 500 index was up 10 percent.