John Paulson’s Paulson & Co Off to a Good Start in 2012

2011 was a rough year for John Paulson’s Paulson & Co. – his Advantage Plus fund was down 52.5% for the year and his other funds didn’t fare much better –  but early indicators show that Paulson is off to a good start this year.

“One of Paulson & Co’s key funds, the Advantage Fund, gained roughly 4% through Jan. 17, according to a person familiar with the fund,” writes the Wall Street Journal. In comparison, “The S&P 500 rose about 2.9% from the end of 2011 to Jan. 17.” It may only be a couple weeks since the start of the year but returns that far above the market’s must come as a relief to Paulson after major losses his funds saw last year.Paulson, who had made billions in 2007 betting against US subprime mortgages, is still bullish about property investment. Paulson “is sticking with bullish investments in residential and commercial mortgage securities, helping his Credit Opportunities Ltd. fund gain about 1 percent last quarter to narrow its 2011 decline to 18 percent.” The renewed demand is poised “to fuel a rebound that’s allowing the Federal Reserve Bank of New York to attract buyers for bonds it took over during the rescue of American International Group Inc. (AIG) in 2008.”