John Paulson Hedge Fund Manager to Invest $250m in New Gold Fund

by Scott Wu | November 18, 2009 at 03:09 pm

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John Paulson, the hedge fund manager who made a fortune from the collapse of the US sub-prime mortgage, is betting on gold. John Paulson plans to invest as much as $250 million of his own money in his new gold fund, estimated to worth about $6 billion.

John Paulson already hold 10% of his $30 billion asset under management in gold-related investments. According to his investors, the new gold fund will be more aggressive, as it will include investments more volatile than the gold price itself. John Pualson believes that the price of gold, now close to $1,150 an ounce, is only beginning to take off.

At the same time, the investments Paulson & Co is set to buy for its new fund could be more volatile than overall gold prices, according to investors, so if gold falls the new fund could underperform.

Paulson's new fund will begin on January 1, 2010. It will include gold-related shares and derivatives.

The price of gold is at record high amid economic uncertainty. Fear for the collapse of dollar drive people to gold as a mean to retain asset value.

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