After gaining instant fame with his massive subprime bet back in 2008/2009, John Paulson can’t seem to buy a clue of late. Over the past couple of years, a series of strategic missteps have resulted in abysmal returns and increasing concern among investors that Paulson may have been nothing more than a “one-trick pony” all along.
Of course, as we pointed out back in November, one of the biggest of those ‘missteps’ seems to have been the creation of a $500 million, long-short equity fund focused on healthcare about two years ago.
The strategy seemed simple enough at the time: make a massive, Paulson-esque bet on the consolidation of large multi-national pharmaceutical businesses, hedge that bet with bearish wagers on the broader markets and sit back and wait for the money to flow in just like with the subprime bet. Unfortunately, exactly the opposite happened in 2016 with the broader markets advancing while Paulson’s largest pharma holdings completely collapsed anywhere from 30% – 85%. Oops.
This post was published at Zero Hedge on Jul 27, 2017.