Paulson & Co, one of the most prominent US hedge funds, has seen its assets under management drop by nearly $2bn in the space of five months as a result of declines in the share prices of pharma companies Allergan and Valeant.
According to the Financial Times, the total amount managed by John Paulson's (pictured) hedge fund business has reached its lowest level in almost a decade.
The company made billions of dollars betting against subprime mortgages ahead of the 2008 financial crisis, with its Advantage Plus fund returning 158.5% in 2007, 37.6% in 2008, 21.5% in 2009 and 17% in 2010.
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However, company documents reportedly show assets under management had fallen to $14.1bn at the beginning of March, down from $16.1bn in November last year, and from previous highs of $36bn.
The paper suggests these falls are largely down to positions Paulson had taken in pharmaceutical companies Allergan, his largest holding, and Valeant, where he is the sixth biggest shareholder.
Allergan was down 14.2% over the year to 31 March, while Valeant's share price fell some 74% over the same period. The latter is currently trading at $33.46, down from August highs of $262.50.
The fund will also likely be further hit on the back of another 17% plunge in Allergan's shares on 5 April, following news that a takeover bid by Pfizer had fallen through.
So far this year, the Advantage Plus fund is down 15%, as it continues to focus on speciality pharmaceutical companies that may be takeover targets.
