Tags: Paulson | Icahn | Hartford | hedge

NY Times: Is John Paulson Turning Into Carl Icahn?

By    |   Friday, 17 February 2012 11:13 AM

Until recently hedge fund heavyweight John Paulson was best known for making billions of dollars on the subprime mortgage collapse and then struggling last year.

But now he’s turning into an activist investor along the lines of Carl Icahn, at least when it comes to one of his investments, The New York Times reports.

That investment is in Hartford Financial Services Group.

As of Dec. 31, Paulson & Co.’s hedge fund held an 8.4 percent stake of the insurance company, making it the largest shareholder. But Paulson’s not happy with the performance of Hartford stock, which has dropped 30 percent in the last year.

Paulson & Co. is publicly calling for a break-up of Hartford, which it says could lift the share price by up to 60 percent.

In filings to the Securities and Exchange Commission Tuesday, Paulson included a later to rebuff arguments by Hartford that it shouldn’t split up.

“Shareholders are entitled to expect the management and the board to show leadership by moving beyond the current phase of identifying potential challenges to working actively to address them,” the letter states.

It’s not clear why Paulson has decided to take the interventionist route. But not everyone is convinced a break-up would be a panacea for Hartford.

"I just think it's an oversimplification of a very complicated, complex process," Dan Theriault, an analyst at Portales Partners, tells Bloomberg. "While it looks good on paper, the devil's in the details."

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Friday, 17 February 2012 11:13 AM
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