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Show me the money!
That’s what Citi Private Bank told hedge fund mogul John Paulson yesterday as the private banking unit asked for its $410 million investment back.
The redemption is the single biggest exit of investor money from Paulson’s hedge funds since some of them started tanking last year.
The 56-year-old investor has about $19.5 billion in total assets, a huge drop from $36 billion at the end of 2010.
Citi told Paulson of its intentions during a morning call yesterday, according to a person close to the situation.
As reported in The Post in May, both Citi and Morgan Stanley put Paulson on a “watch” list, meaning they wouldn’t add any new money for three months.
The two had about $500 million invested in Paulson’s Advantage fund and its leveraged version, Advantage Plus, which are the group’s worst-performing funds.
Advantage is down 13 percent through July, after dropping 36 percent in 2011. Advantage Plus is down 20 percent in 2012, after a 52 percent fall in 2011.
Paulson began courting money from bank platforms after he became famous for the savvy subprime short bet that made him a billionaire.
By pooling money, platforms allow individuals to avoid the hefty $10 million minimum investment required to get into a big-name fund like Paulson’s.
But the newer investors haven’t fared as well as those who’ve been with him longer. About 20 percent of Paulson investors are still underwater, a source close to the firm said.
Some investors who’ve redeemed have complained about the heavy focus on gold, which comprises about 25 percent of the Advantage portfolios. Gold stocks and ETFs account for 44 percent of the firm’s stock holdings.
Citi is redeeming from the two Advantage funds, as well as two other Paulson funds: Paulson Recovery, which invests mostly in financial stocks; and, Paulson Partners, which invests in merger arbitrage.
Meanwhile, gold yesterday soared 2 percent, to $1,672.80.
Citi and Paulson declined to comment.