Paulson's approach to new disclosure forms


Recall that Dodd Frank set forth some new disclosure requirements for hedge funds. Form ADV Part 2 has expanded significantly, asking for much more information. And then there is the all-new Form PF, which gathers detailed information on positions for such things as liquidity, asset classes, geographic dispersion, turnover and the like. Form PF is filed with the Financial Stability Oversight Council, which is concerned with systemic risk; the form is not made public.

These new regulations didn't necessarily sit well with alternative investment providers, but the general sense was the industry got off a bit light. But that doesn't mean companies won't try to make information as opaque as necessary. Notes DealBook, "John Paulson, the founder of Paulson & Company, has filled out a form that, in parts, is hard to decipher. Rather than use the names of each fund (Paulson Plus, Paulson Enhanced, or Paulson Partners), Mr. Paulson has opted to mask the portfolios by simply numbering them. So Paulson Fund 1, for instance, has an investment minimum of $10 million and manages assets of more than half a billion dollars. Paulson Fund 2, meanwhile, has a little more than $2 billion in assets. And so on through Paulson Fund 8."

This appears to be a novel approach. But the firm still has provided some good information. "Their auditor is Rothstein Kass. Their marketer is Plus Securities. But perhaps the most interesting relationship to emerge from the filings is the heavy reliance on JPMorgan for prime brokerage. Nearly all of his funds list only JPMorgan as the prime broker, save one, which lists Goldman Sachs, according to the filings."

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