Stormy Weather Continues For Paulson’s Fund

by Todd Shriber

After an April financial performance that can be described as middling at best, John Paulson’s Paulson & Co. saw its flagship hedge fund, the Advantage Plus Fund, do what plenty of other hedge funds did in May: generate negative returns.

A loss of 6% last month means the $9 billion Advantage Plus Fund is down 7.6% this year, according to the Financial Times. Making matters worse is the fact that the average hedge fund lost just 1.39% last month, FT said.

Adding insult to injury, Paulson’s gold fund also lost over 6% in May, which is well above the 0.5% slide for one of the firm’s largest holdings, the SPDR Gold Shares (GLD). Paulson & Co. owned 31.5 million shares of GLD, the world’s second-largest exchange traded fund by assets, at the end of the first quarter, according to tickerspy.com data.

As Trader Daily noted after reviewing Paulson & Co.’s April performance, Paulson has shown a penchant for starting the year off in lethargic fashion only to finish strong. That may once again be the case in 2011, but the firm certainly has its work cut out for itself.

Remember the buzz about Chinese timber firm Sino-Forest (SNOFF) last week? Well, when a five-day chart looks like this, it’s hard for any firm that owns 34.7 million shares of that stock to make money. That’s what Paulson’s stake in Sino-Forest was as of April 29, according to tickerspy.

Sino-Forest’s plunge last Friday resulted in a $460 million paper loss for Paulson & Co., FT reported. Evidently, June is not going much better than may did for the illustrious hedge fund.

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