The future of John Paulson's flagship funds is very much in question right now.
The news that Citigroup's private bank is redeeming more than 0 million from several funds is more bad news, but not at all surprising. The performance of the funds has been woeful, especially by Paulson's standards, and, as Deal Journal reports, the firm's assets under management have fallen to less than billion, from billion a year and a half ago.
You can't blame limited partners from pulling the plug. Citigroup apparently will redeemed funds from the Advantage and Advantage Plus funds, the merger fund and the recovery funds.The standard take from Paulson, as noted by Deal Journal, is that the firm is accustomed to both inflows and outflows.
Some possible new limited partners have apparently contacted the company. Would this be wise right now? Well, some might be inclined to think that Paulson's streak of bad luck is bound to end soon, and this may well be a good time to get in. The firm may be willing to extend some deals right now on management and performance fees. Existing investors, assuming they've written off the losses, might take some comfort in the fact that the firm will not come even close to the high water mark for many years.
- here's the article