John Paulson’s hedge fund lays off workers By Carleton English March 16, 2018 | 11:30am | Updated Modal Trigger John Paulson Getty Images The ax has fallen at John Paulson’s hedge fund. Several employees of the once-mammoth Paulson & Co. were let go Thursday amid years of poor performance, The Post has learned. Cuts were across the board but also included key veterans who have been with the fund for more than 10 years. Among the senior-level hedgies being shown the door were Keith Hannan, head of trading, Brad Rosenberg, head credit trader, and partners Victor Flores and Allen Puwalski. “We are right-sizing the firm to focus on our core expertise on areas that are growing,” a firm spokesman told The Post, declining to comment on specific individuals affected. Paulson’s fund, which once managed as much as $38 billion in 2011 due in part to well-timed bets against the housing market in the lead-up to the financial crisis, has struggled to replicate prior successes. The hedge fund now manages $9 billion — with roughly 70 percent of that being Paulson’s own money, according to sources. Performance has been hit by the fund’s outsize bets in the health care market over the last three years, especially the specialty pharma sector — most notably Valeant Pharmaceuticals, which has been a performance killer for many hedge funds. https://nypost.com/2018/03/16/john-...ce=nypbusinesstwitter&utm_campaign=SocialFlow
John Paulson probably got very lucky in 2008 but does not have the skills to maintain a consistent profitable performance.
Even with the cut in fees, hedge fund managers are still grossly overpaid compared to passive alternatives. FOr once, retail investors with access to passive ETFs/funds actually outperformed rich investors with access to hedge funds and dumb enough to put money with overpaid, underperforming hedge fund managers.
I don`t believe he was first aboard that train... Sounds like he caught wind of it, jumped on board & piggybacked it... but to his credit, he pushed his chips into the middle as it`s one thing to see an opportunity & another to act on it with size.
investing with well known hedge fund manager is like investing in a restaurant or a theatre production. it is your way of saying you have arrived and can brag to your neighbors that you are in a special club.. it is not a way to make money, between hedge fund fees and taxes it is by definition a loser's game.
The hedge fund industry is full of ultra-rich people who got there despite destroying massive value to their clients. I do not understand why this industry counts so many suckers among the customers, given that ALL the customers are rich and should be smart. If they're suckers, how did they become rich in the first place? Yet, many of them are dumb suckers who made the hedge fund managers rich at their own expense. Very weird.
One can say the same about actively managed mutual funds, financial advisers.... They are all on a Normally Distributed curve, some do better than average, some do worse but most will underperform because of fees they charge. Once you are rich, you no longer worry about performance, you worry about preservation of wealth. Having a smooth reasonable return is more important than an outsize but volatile return.