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Billionaire John Paulson up 14% on M&A bets

Kaja Whitehouse

Billionaire investor John Paulson is starting off 2015 with a bang — thanks to a heated merger market.

The Paulson Enhanced fund, which bets on mergers and acquisitions, is up a whopping 13.9% through March 20th, according to performance data from Swiss-banking group SYZ, obtained by USA TODAY.

Meanwhile, the Paulson International fund, which also bets on mergers but with less leverage, is up 6.6% through the same period, according to SYZ data.

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The Paulson Advantage fund, which seeks to benefit from takeovers and bankruptcies, is also up this year by 5%, the SYZ data shows.

Hedge-fund manager John Paulson
David A. Grogan | CNBC

A spokesman for Paulson & Co. declined to comment.

Paulson, who manages $19.3 billion through Paulson & Co., has had a tough time of it since he rose to super-stardom shorting the subprime mortgage market in 2007. That bet earned his firm a whopping $15 billion at a time when the rest of Wall Street was just starting to wrap its collective brain around the devastation to mortgage crisis would bring them.

Paulson's performance has been choppy ever since, however, including large losses in 2011 and again last year. In 2014, the levered version of the Paulson Advantage fund, for example, lost a whopping 36%.

This year, Paulson is making up for the losses with bets on companies he thinks are about to get bigger and better through marriage. M&A has long been his specialty and has helped him raise money in recent years.

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Salix Pharmaceuticals, for example, is up 50% this year, trading recently at $172.72 a share, thanks to Valeant Pharmaceutical's offer to buy it for $173 a share in cash. Paulson bought the stock last year when it was trading closer to $102 a share, and now it's now the firm's sixth largest holding, according to data from FactSet.

Shire Plc., meanwhile, is up 20% this year. Paulson was hurt by the biopharmaceutical stock last year after it terminated a merger deal it had with AbbVie Inc. But the stock is back up on its plan to merge with NPS Pharmaceutical in a deal valued at $5.2 billion.

In his letter to investors last month, Paulson said he expects his merger bets to continue to pay off this year.

"We remain well-positioned to take advantage of attractive merger related opportunities in the robust M&A environment," the letter said.

Other hedge funds that are doing well so far this year include:

*Lee Ainslie's Maverick Fund is up 6% through March 29th, according to data from HSBC's weekly hedge fund report, obtained by USA TODAY.

*Louis Bacon's Moore Global is up 6.8% as of March 12th, according to HSBC data.

*Bill Ackman's Pershing Square is up 6.2% as of March 17th, according to HSBC data.