John Paulson, the billionaire investor who has been one of the most bullish investors in gold, cut his hedge-fund firm's exposure to the precious metal by more than half in the second quarter, according to a securities filing Wednesday.
Paulson & Co. trimmed its holdings in gold exchange-traded fund SPDR Gold Trust GLD +0.99% by more than $2 billion during the second quarter, the filing showed.
The firm also exited from call options it held in gold-mining company Barrick Gold Corp. ABX.T +4.78% Paulson continues to hold some other gold investments.
Paulson has suffered deep losses in gold this year as stocks have climbed, inflation has remained tame and investors have dumped the precious metal.
The filing shows that Paulson owned shares in the SPDR Gold Trust valued at about $1.2 billion as of June 30, down from almost $3.4 billion at the end of the first quarter. The shares were held in Paulson's dedicated gold fund, not in his larger funds that, for example, bet on a broad economic recovery or on corporate deal activity.
The firm, manager of about $18 billion, in the second quarter added new positions in Kodiak Oil & Gas Corp., KOG -0.21% T-Mobile US Inc., TMUS -2.44% and Smithfield Foods Inc. SFD -0.33% among others. It also shifted around other positions, the filing shows, including exiting from its stakes in H.J. Heinz Co. and Wells Fargo WFC -0.51% & Co.
The firm is a regular trader in companies involved in deals. Such merger-and-acquisition activity likely explains the firm's new stake in Smithfield, which agreed in May to be bought by China's Shuanghui International Holdings Ltd.
Paulson reported owning nearly 15 million shares in Kodiak, of which there has long been speculation that it is an acquisition target.
In deal-related activity in the third quarter, Paulson this week outbid Kohlberg & Co. for Steinway Musical Instruments Inc., LVB +7.89% agreeing to buy the company for about $512 million.
Paulson also exited from a few stocks entirely during the second quarter, according to the regulatory filing, including McMoran Exploration Co. and Plains Exploration & Production Co.
Mr. Paulson notched huge profits in 2007 and 2008 betting against subprime mortgages, and investment gains plus new inflows of cash drove his firm to $36 billion in assets under management. Missed calls since, plus investor redemptions, have shrunk the size of the firm.
This year, although the gold fund has suffered, his other funds have been faring better.
The Paulson Recovery fund, for example, was up nearly 34% through July, according to a person familiar with the firm, and his merger-arbitrage fund was up 12.9% for the same period; another version of the fund that uses additional leverage was up 26.6%.
Tana GoldFields Paulson Halves Exposure to Gold