Paulson Hedge Fund Losses
Paulson's $9 Billion Fund Falls 20% from China, Banks
Losses have swept through billionaire John Paulson's hedge funds like a forest fire as big bets on a Chinese lumber firm and US banks backfire.
The investment guru, who made a fortune betting against the American sub-prime mortgage market, has lost hundreds of millions of dollars following the collapse in the share price of Sino-Forest, a Chinese forestry company.
Investors have told the Wall Street Journal that Paulson's $9bn Advantage Plus fund lost more than 13% in the early part of this month. This comes on top of a fall in May, when the flagship fund reportedly lost another 6%, leaving it down 19.65% for the year.
Paulson's funds are among the biggest investors in Sino-Forest, a Chinese and Canadian timber firm that has seen its shares fall more than 80% since a report surfaced in June accusing it of exaggerating the size of its assets. This month short seller Carson Block's Muddy Waters firm called Sino-Forest a "pump and dump" scheme and accused it of committing fraud. Block's firm challenged the amount of land Sino-Forest said it bought in Lincang City in China's Yunnan province, saying that it does not match city records. Muddy Waters' claims are being fiercely disputed by the company. Source