Hedge fund manager John Paulson, who raked in $20 billion in 2007 by betting against financials and all things subprime, is looking to grow his gold stash with a new fund, tapping into investor concern about a weak U.S. dollar and inflation.
According to the WSJ, the famed money manager will launch in January 1st a fund dedicated to buying up shares of gold miners and other bullion-related investments. The new fund will invest in gold-related shares and gold derivatives and will aim to outperform gold prices.
Mr. Paulson, who spoke about the fund at a meeting with his investors in New York, argued that the bull run was only beginning for the precious metal. He said he was starting it in part to give himself more personal exposure to gold.
Paulson is already a major holder of gold. For the past year or so he has been building gold positions in the firm’s current funds. His investments include shares of Johannesburg-based gold producer AngloGold Ashanti Ltd (AU). The billionaire manager also has a large stake in Gold Fields (GFI), Kinross Gold (KGC), Market Vectors Gold Miners ETF (GDX) and SPDR Gold EFT (GLD) in which he has over 31 million shares or 8.6%.
Mr. Paulson currently has more than 10% of his $30 billion or so under management in gold-related investments, according to his investors. He is estimated to be worth about $6 billion, and plans to invest as much as $250 million of his own money in the new fund.