UBS closed its feeder fund that provided clients access to John Paulson’s Advantage fund at the end of July.
The UBS announcement follows Bank of America’s decision to cut off its clients access to the fund as well, reports Reuters. UBS cited the high cost of operating the portfolio for its closure. Bank of America told financial advisors it has concerns that Paulson’s fund is investing in illiquid securities. The Advantage fund tanked 19% in 2014, but is up 2.2% this year.
UBS clients can still invest with Paulson through a separate share class for the Advantage fund. UBS can also lead clients to the Paulson Partners fund, which is up 8.5% for the year. Bank of America similarly has offered clients the choice of rolling their assets into the Paulson Partners fund.
The Paulson Advantage fund holds about $2.8 billion, far below its $18 billion peak in 2011.
Photo: Holly Victoria Norval