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Subprime Sublime For Paulson, Hayman

Date: Wednesday, August 8, 2007
Author: Hedge Fund Daily

Amid the bad news of fallen funds, wrong way bets and liquidations there are some smiling faces at firms that got it right about the spiraling down subprime mortgage sector. Performance of the Dallas-based Hayman Capital Partners’ Hayman Subprime Credit Strategies Fund has been out of this world, notching a stratospheric 305% as of July 31. In July alone, it took off with 107%. Hayman has company up there; Paulson & Co.’s Paulson Credit Opportunities Fund gained 76% for a whopping 303% as of July 31. “Hedge funds are well positioned to take advantage of the wide price disparities caused by the volatility,” Mathieu Klein, CEO of France’s Darius Capital Partners, told Bloomberg News. “There are many opportunities created by this market.” And it appears that Paulson and Hayman are among the few who were savvy enough to take advantage of them. Some of their, ahem, less-stellar offerings are Hayman’s flagship Hayman Capital Master Fund, which returned 60.3% in July, and 149.1% YTD, and Paulson Creditor Opportunities II, up 56% for the month, and 150% YTD. Paulson’s worst performer, Paul Merger Arbitrage, is up 43% for the year. And at least Hayman expects more good tidings to come. In a letter to investors, he wrote, “There will be a ‘re-pricing’ of risk on a global scale that will mean more credit funds being carried out the door feet first.” Meanwhile, Dealbreaker reports rumors that Goldman Sachs may be liquidating its flagship Global Alpha Fund, which is down 16% this year.