Bloomberg News

Paulson, Vinik, Tudor Sell SPDR Gold ETF Shares; Soros Buys

February 14, 2012

Feb. 14 (Bloomberg) -- Paulson & Co., the hedge fund founded by billionaire John Paulson, cuts its stake in the SPDR Gold Trust by 15 percent in the fourth quarter, while George Soros increased his holdings.

Paulson held 17.3 million shares in the exchange-traded fund backed by gold as of Dec. 31, compared with 20.3 million at the end of September, Securities and Exchange Commission filings showed today. The firm remained the largest holder in the trust, data compiled by Bloomberg show. Paul Touradji sold his entire stake, while Vinik Asset Management Holdings, Tudor Investment Corp. and SAC Capital Advisors LP sold shares. Soros Fund Management LLC increased its stake to 85,450 shares from 48,350.

Last quarter, gold futures declined for the first time in more than three years, partly on sales to cover losses in equity markets. A global rout in the third quarter erased more than $9.7 trillion from the value of global stocks. Some investors opted for cash, said Michael A. Gayed, the chief investment strategist at Pension Partners LLC in New York.

“Gold was one of the best performers last year, so they sold the asset to bail them out of other losses,” Gayed, who helps oversee $150 million, said today in a telephone interview. “We are seeing people piling into gold again with an improvement in stock markets and commodities.”

Europe’s Debt

Last month, gold jumped 11 percent, the biggest January rally in 29 years, on concern that Europe’s debt crisis would escalate, spurring demand for the metal as a haven. The Federal Reserve affirmed its benchmark interest rate will remain close to zero percent until at least late 2014, boosting the appeal of commodities as a hedge against inflation.

In 2011, gold futures gained 10 percent, the 11th straight annual gain. The metal climbed to an all-time high of $1,923.70 an ounce on Sept. 6 as investors sought to diversify from equities and some currencies.

“The fear trade is pulling people back to gold,” said Jeffrey Sica, the Morristown, New Jersey-based president of SICA Wealth Management, who helps oversee $1 billion of assets. “We will see gold prices rise to a record this year.”

Paulson, with $24 billion under management, uses the SPDR gold holdings for the fund’s gold-denominated share classes. Armel Leslie, a spokesman, declined to comment.

The New York-based fund cut its American depositary receipts in AngloGold Ashanti Ltd., the second-largest stake in its reported portfolio, by 6.5 percent to 34.3 million.

Vinik, Tudor

Vinik Asset Management, the Boston-based hedge fund founded by Jeffrey Vinik, who formerly ran the Fidelity Magellan Fund, held 2.6 million shares in the SPDR gold ETF as of Dec. 31, down 775,000 shares from the end of the third quarter.

Tudor Investment, the $11 billion hedge fund based in Greenwich, Connecticut, sold in entire stake of 200,000 shares of the SPDR gold ETF. Patrick Clifford, a spokesman, declined to comment.

Steven A. Cohen’s SAC Capital and New York-based Touradji Capital Management LP cut SPDR gold positions.

SAC Capital, which manages $14 billion and is based in Stamford, Connecticut, held 179,601 shares, compared with 184,601 in the third quarter. Jonathan Gasthalter, a spokesman for SAC Capital, declined to comment.

Touradji Capital, founded by Paul Touradji, sold its entire stake of 45,000 shares in the SPDR gold ETF. The hedge fund bought the securities in the third quarter. Leslie, also a spokesman for Touradji, declined to comment.

Michael Vachon, a spokesman for Soros, did not respond to a voicemail.

Lone Pine

Lone Pine Capital LLC, the hedge fund run by Stephen Mandel Jr., acquired 3.75 million shares of the SPDR gold ETF.

Stevens Capital Management Holdings Ltd. sold its entire stake of 77,019 shares in the SPDR gold ETF. GLG Partners LP sold its full stake of 94,675 shares.

Money managers who oversee more than $100 million in equities must file a Form 13F with the SEC within 45 days of each quarter’s end to show their U.S.-listed stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold.

Global holdings in exchange-traded products backed by gold were 2,390.7 metric tons, approaching a record high, according to Bloomberg data. They rose 4.8 percent in the fourth quarter and 7.8 percent in 2011. Central banks around the world added 157 tons to their holdings in the six months ended Nov. 30, World Gold Council data show.

Gold futures for April delivery fell 0.4 percent to $1,717.70 on the Comex in New York.

--With assistance from Noah Buhayar, Kelly Bit and Saijel Kishan in New York. Editors: Patrick McKiernan, Steve Stroth

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net.

To contact the editors responsible for this story: Steve Stroth at sstroth@bloomberg.net


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