Paulson busy buying banks | MarketWatch
As you see below, Paulson’s fund has added BAC, Citi, Indymac, GS and even State Street using the enhanced corpus from shorting the world’s top banks against the MBS boom in 2007 when we had tipped over in volumes and quality of MBS/Sub-Prime
Interestingly, Dimon’s JP Morgan does not figure in this list. In an earlier article we had also brought out media reports of his play on the Kraft Cadbury deal! It wouldn’t be surprising if he gets a couple of ME And Asian investors in his hedge funds in a couple of months. He is sitting on a pretty pile and it will be much bigger in a couple of months when the banks start making some real gains after the accounting bounce back in the last 2 quarters in their fixed income portfolio
Paulson, one of the world's largest hedge-fund firms, held 300 million shares of Citigroup Inc. (C 4.15, +0.10, +2.47%) at the end of September, according to a regulatory filing late Friday. Three months earlier, the firm had no stake in the financial-services giant.
The stake in Citi was valued at $1.45 billion on Sept. 30, according to the filing. It’s not clear whether Paulson still owns the stake, but the firm doesn't specialize in rapid trading.
Citi stock climbed 2.5% to $4.15 during after-hours action Friday.
The Citigroup investment follows a big move by Paulson into Bank of America Corp. (BAC 16.00, +0.02, +0.13%) shares earlier this year. See story on Paulson's Bank of America stake.
Paulson, run by John Paulson, is best known for generating huge returns betting against mortgage-related securities in 2007 and financial institutions in 2008. However, the firm late last year launched the Paulson Recovery Fund, which invests in financial-services firms that are looking to shore up weakened capital positions.
As 2009 began, Paulson was among a group of private-equity investors who acquired failed bank IndyMac from the Federal Deposit Insurance Corp., injecting $1.3 billion into the lender.
In the second quarter, Paulson’s hedge funds bought bank stocks including Bank of America, Goldman Sachs Group (GS 176.68, -0.08, -0.05%) and State Street Corp. (STT 40.40, -0.05, -0.12%) , according to securities filings.