ARTICLE INTERVIEW: Beryl's Radonjic quoted in The Wall Street Journal "Paulson: All That Glitters Isn't Gold" June 7, 2013

John Paulson has a message for investors: Stop paying so much attention to my gold bets.

Mr. Paulson, the billionaire hedge-fund manager who has been one of the most bullish investors in the precious metal and suffered deep losses as a result, is eager to focus attention on his better-performing investments, which also dwarf his firm's gold fund in size.

Not So Precious

Now, his $18 billion firm, Paulson & Co. will stop including the performance of the gold fund when it shares monthly updates with investors in its healthier funds, according to a letter sent to his investors Thursday. From now on, investors in the gold fund, which manages about $360 million, will receive separate word of the fund's returns, the letter says.

Mr. Paulson, the firm's founder, has grown frustrated that his firm's gold troubles have obscured much-better returns from his other funds. Paulson Gold was down 47% for the year through April, including a 26.5% decline in April. The firm hasn't told investors about May's returns for the gold fund yet.

"At the request of clients and consultants, we will be reporting the performance of our Gold Funds separately to investors in those funds and interested parties," the letter says, noting that those funds represent only 2% of assets under management. The funds "have received a disproportionate amount of attention over recent months and have detracted attention from the performance and positive developments of our other funds."

The firm will begin conducting separate conference calls for the gold fund. It also plans to stop broadly reporting the performance of the gold share class of its various funds in its regular investor updates, though it will share those figures with clients who are invested in the gold-share class or with people who specifically ask for it. The gold share classes were introduced by Mr. Paulson to give all of his investors access to the metal.

One of Mr. Paulson's other funds has been on a tear, while others have held up better than gold, spurring the move. The Paulson Recovery fund, for example, which manages about $2 billion and invests in companies that benefit from a broad economic upturn, jumped 4.9% in May and is up 27% on the year, according to the letter to investors. The fund has made money on "insurance, banking, and defaulted securities," it said.

Paulson & Co.'s two credit funds, his biggest, rose 3.6% in May and are up 16.2% for the year through May. They have profited from bets on defaulted and convertible securities, the investor letter says.

Meanwhile, his merger funds are up between 8.2% and 17.4% through May, profiting from bets on various deals.

Still, Paulson Advantage and Paulson Advantage Plus funds, which bet on anticipated corporate events and manage about $3.6 billion, also have been hit by the decline in gold because of positions in gold stocks. Those funds are up 2.4% and 3.3%, respectively, in May. The Paulson Advantage fund is up 4.4% for the year, while Paulson Advantage Plus is up 6.1% in 2013.

"Lots of people are beating up on him because he's been wrong on gold for some time, but he has many different strategies, and those have been performing pretty well," said Vidak Radonjic of Beryl Consulting Group LLC, who advises on hedge-fund investing. Mr. Radonjic, who recommends his clients invest with smaller managers because he believes they are more nimble, nonetheless said he found the gains of Mr. Paulson's larger funds impressive.

Mr. Paulson made his name scoring $20 billion of profits over 2007 and 2008 by betting against subprime mortgages and financial companies ahead of the financial collapse.

Gold prices have fallen 15.5% in 2013, despite a rise of 1.2% on Thursday. As stocks have climbed and inflation has remained tame, investors have dumped gold-tied investments.

The shift in reporting doesn't mean Mr. Paulson has reduced his commitment to gold. He isn't selling gold investments, according to people close to the matter, citing what he considers to be an attractive valuation for many gold-mining companies, which have slumped for several years.

Heavy losses from gold and other investments in Mr. Paulson's Advantage funds made them much smaller, putting more of a focus on the Recovery fund and other better performers.

He also remains bullish on real estate, believing the current turnaround will continue for as many as four or five years, people familiar with the matter said. He has noted that new home building remains well under peak levels and also under the level needed to satisfy the nation's population growth.

Write to Gregory Zuckerman at and Juliet Chung at

A version of this article appeared June 7, 2013, on page C1 in the U.S. edition of The Wall Street Journal, with the headline: Not So Precious | Paulson & Co. is hoping to draw attention away from its gold betsPaulson: All That Glitters Isn't Gold.