Legendary Investor Paulson Invests $250 Million In New Gold Fund

Hedge fund manager John Paulson plans to invest as much as $250m of his $6bn personal fortune in a new gold fund he is in the process of establishing.

Mr Paulson, best known for making $3.7bn from bets on the collapse of the US sub-prime mortgage market, is believed to have told investors that the new fund, to be run by Paulson & Co, will invest not just in gold miners but also in other investments related to the precious metal.

Although not Paulson & Co's first foray into gold, given approximately 10pc of the $30bn it has under management is in gold-related investments, it would be the firm's first pure-play gold fund.

No fund-raising cap is thought to have been set at the moment, but Mr Paulson's personal commitment is considerable and is likely to be seen as a highly attractive draw by investors.

Hedge fund investors – known as limited partners in the trade – take a great deal of comfort from managers' – known as general partners – co-investments.

Investors will inevitably question the timing of the new fund, coming at a point when gold is at an all-time high of close to $1,150 an ounce.

However, Mr Paulson is one of the most successful hedge fund managers in the US, and is known for his knack of buying assets at low prices.