Kelly Bit’s exclusive on John Paulson’s July Performance sheds some light on the returns of Paulson Recovery Fund. It appears that the Recovery Fund has gained 35 percent through July of this year, easily becoming landing in top order of the best performing hedge funds of the year. The fund must have netted a +10 percent gain in July to reach such high returns, as the net return through June was +25.2 percent.
Paulson Recovery Fund profited from several holdings
The Recovery fund has profited from several of its financial holdings and especially from its position in Radian Group Inc (NYSE:RDN), a mortgage insurer that has gained 143 percent YTD, Bit reports for Bloomberg. Paulson said in April that Radian will go up till $20, up 80 percent, till 2015. The main holdings of financials focused Recovery fund include, asset managers and insurance companies. Recovery fund has also raked in massive gains from investment in MGIC Investment Corp. (NYSE:MTG), up almost 200 percent for the year, Genworth Financial Inc (NYSE:GNW), up 78 percent YTD.
The $1.5 billion event driven fund was down 28 percent in 2011, one of the worst performers of that period. As the net returns of the fund in 2013 have now eclipsed the -28 percent loss, this allocation can now charge performance fee from its investors. The Paulson Recovery Fund was up only 5 percent in 2012.
Paulson’s credit and merger funds are above high watermark for the year
Bit also said that Paulson’s credit and merger funds are above high watermark for the year. Of note here is Paulson’s investment in Leap Wireless International, Inc. (NASDAQ:LEAP), where he is the third largest shareholder. The stock is up +150 percent for the year, skyrocketing in July and boosting the returns of Paulson’s M&A funds. AT&T Inc. (NYSE:T) announced that it will buy Leap Wireless International, Inc. (NASDAQ:LEAP) for $1.2 billion, the merger is being investigated by a shareholder litigation firm to ensure that the terms of the deal give fair value for the sale of the company.
John Paulson has also gained from his other picks in the telecom industry, Sprint Nextel Corporation (NYSE:S) and MetroPCS Communications, earlier this year.
As Paulson funds ride the wave housing recovery, the scrutiny of his gold fund may diminish a little.