John Paulson's Paulson & Co. is famous for the fortune made by betting against subprime at the beginning of the crisis. And, now, it looks as if he's ready to turn his focus to some UK financials. Paulson & Co. yesterday disclosed short positions in four of the five largest British banks.
The bet now makes Paulson the largest short seller of UK banks. According to the filing, Paulson's hedge fund has taken a $650 million bet against shares of Barclays (BCS), a $542 million bet against Royal Bank of Scotland (RBS), and a $483 million bet against Lloyds TSB (LYG).
Hedge funds run by John Paulson, have bucked a trend of worldwide hedge fund losses by making returns of more than 19% this year.
One fund generated 589.62% in what is thought to be the largest dollar return in a year from a single hedge fund.
Investors said the Paulson Advantage Plus fund was one of the best performers so far this year, with a net return of 19.44% for the year to the end of August. The fund made 158.75% last year and, through a combination of investment gains and new capital, has grown from about $100m (Ä70m) at the start of 2007 to almost $9bn, Financial News Online can exclusively reveal.
Paulsonís Advantage fund was up 13.22% for the year to the end of August, having made 100.15% last year. Its Credit Opportunities fund was up 12.95%, having made 351.72% last year; its Credit Opportunities fund was up 12.46%, having made 589.62% last year; its Enhanced fund was up 8.17%, having made 116.48% last year; and its International fund was up 5.17%, having made 51.7% last year.
Paulson turned a $500m investment in its Credit Opportunities fund into $3.5bn over the course of last year, considered by investment consultants and investors the largest dollar amount ever generated by a hedge fund in a year.