BREAKING NEWS FROM CNBC'S KATE KELLY: PAULSON IS HAVING A TOUGH AUGUST AS A RESULT OF ITS LONG EQUITIES EXPOSURE
WHEN: WEDNESDAY, AUGUST 17, 2011
WHERE: CNBC'S "FAST MONEY"
Following is the unofficial transcript of breaking news from CNBC's Kate Kelly today on "Fast Money."
All references must be sourced to CNBC.
KATE KELLY: THE MARKET VOLATILITY OF LAST WEEK WAS NOT KIND TO THE HEDGE-FUND BEHEMOTH PAULSON & CO., WHOSE FLAGSHIP FUND WAS DOWN 34% THROUGH FRIDAY'S CLOSE, ACCORDING TO AN INVESTOR WHO WAS BRIEFED ON THE PERFORMANCE JUST TODAY PAULSON PLUS THE LEVERED VERSION OF PAULSON'S MAIN FUND, FELL AGAIN, AFTER DROPPING TO 31% ON THE YEAR THE PRIOR WEEK. ITS UNLEVERED SIBLING, THE ADVANTAGE FUND, IS NOW DOWN 23.5% ON THE YEAR. PAULSON'S MERGER FUNDS ARE FARING CONSIDERABLY BETTER, THOUGH STILL IN THE RED WITH ENHANCED THE LEVERED FUND, DOWN 7% YEAR TO DATE, AND PARTNERS, THE UNLEVERED FUND, DOWN 3% YEAR TO DATE. INVESTORS, WHO KNEW PAULSON IS NET LONG IN EQUITIES, HAVE NOT BEEN SURPRISED BY THE LOSSES ALTHOUGH OBVIOUSLY THEY WANT TO KNOW THE MAGNITUDE OF THEM WEEK TO WEEK AFTER ALL THE S&P FELL NEARLY 2% LAST WEEK AFTER A WILD RIDE AND MANY PLAYERS GOT BADLY HURT IN THE CARNAGE. PAULSON REPORTED JUST RECENTLY THAT IT HAD SOLD DOWN TWO POTENTIALLY PROBLEMATIC POSITIONS, BANK OF AMERICA AND CITIGROUP, WHICH MAY HAVE CURBED THE PAIN A LITTLE BIT NONETHELESS, THE INVESTOR COMMUNITY IS STARTING TO SPECULATE ON WHAT KIND OF REDEMPTIONS THE $35 BILLION FUND COMPANY MAY SEE THIS QUARTER. ONE THING WORKING IN PAULSON'S FAVOR, HIS EXPOSURE TO GOLD. ALL THE FUNDS I MENTIONED ARE AVAILABLE IN EITHER GOLD OR DOLLAR DENOMINATIONS AND THE GOLD VERSIONS ARE IN ALL CASES PERFORMING BETTER FROM WHAT I HEAR AND THAT MAKES A LOT OF SENSE BUT PAULSON DOESN'T RELEASE THOSE FIGURES ON A WEEK TO WEEK BASIS, SO WE DON'T KNOW THE DETAILS YET
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