Hedge Fund Paulson & Co Buys $100 Million Worth of CB Richard Ellis (CBG) ~ market folly

Thursday, June 11, 2009

Hedge Fund Paulson & Co Buys $100 Million Worth of CB Richard Ellis (CBG)

John Paulson's hedge fund firm Paulson & Co has made another bet. And, this time around, they're focusing again on the real estate recovery theme. After recently announcing their real estate recovery fund, Paulson has now announced that they will buy $100 million worth of CB Richard Ellis Group (CBG) stock. The company is raising $550 million ($400 million in 10 year notes & $150 million in equity) and Paulson looks to fill the bulk of the equity offering.

Paulson's purchase equates to buying 13.4 million shares of CBG. For a multi-billion dollar firm like Paulson, this investment is just a drip in the overall bucket. But, it fits right along with his current theme of slowly dipping into real estate as he wagers it will eventually recover. The water may not be warm, but the payoffs could be huge for jumping in early. So, while he may not have made a huge splash quite yet, Paulson has definitely started to get constructive (even if he still remains bearish on the economy near-term). And, as we all know, picking the exact bottom is damn near impossible.

So far though, Paulson has had a good year. Through the end of May, Paulson's main fund was up 8.75% for the year as noted in our May 2009 hedge fund performance numbers post. Besides his real estate entrance, Paulson has also made a large entrance into Gold, buying $4.3 billion worth of gold related entities. Paulson's massive success through this crisis has made him a 'must-follow' and as such we'll continue to keep an eye on his movements. In the mean time, you can check out the rest of his portfolio here.

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