U.S. Hedge Fund To Kick Off Investor Alliance To Shake Up Gold Sector - Report
(Kitco News) - In what is being referred to as an “unprecedented” move, a well-known gold bull and the man behind the U.S. hedge fund Paulson & Co, John Paulson, is creating an investor alliance that will work on turning the gold mining sector around, Reuters reported citing sources.
The alliance will be named the Shareholders Gold Council (SGC) and will consist of a dozen of investors who will be looking into how to improve returns of gold mining companies.
Some of the big names include Delbrook Capital, Livermore Partners, Tocqueville Asset Management, Kopernik Global Investors, Adrian Day Asset Management, Apogee Global Advisors and Equinox Partners, Reuters reported.
Two other huge names — BlackRock and Van Eck Associates — are currently in discussions to join the group, people familiar with the matter told the news agency.
The launch date is set for some time June, the report specified.
“The alliance is unusual because there is no similar group of investors targeting a specific sector, activism experts say,” Reuters reported.
“I have never heard of an industry wide shakeup effort by a coalition of major shareholders,” chair of Norton Rose Fulbright Canada Walied Soliman told Reuters, adding that the move is “unprecedented.”
The news was first floated around during a gold conference last September.
The announcement comes at a much needed time for the gold mining sector. The value of the Canadian gold mining index is down 40% over the past decade, while gold prices are up 46% and the S&P 500 index is also up 95% over the same time period.
Some of the things to be taken on by the investors group are compiling research reports on the gold mining sector. The goal is to improve accountability by paying closer attention to mining companies, with the hope that it will boost “capital allocation, compensation and corporate governance,” Reuters said.
Paulson is known for being a perpetual gold bull. Just three years ago he was holding onto about 10 million shares in the SPDR Gold Trust. Since then, the total has dropped down to 4.3 million shares as of the end of Q1 2018, but Paulson is still very much interested in the yellow metal.