BofA (BAC) to Stick it Out with Paulson Following Interim Call, Amid Performance Issues

August 29, 2012 10:22 AM EDT
Bank of Amerca (NYSE: BAC) shares are trading stronger Wednesday following a Tuesday night conference call with hedge fund giant John Paulson.

Though BofA advisors and Paulson communicate quarterly, the call was a special interim event for the parties. Concerns have surrounded Paulson's performance and certain BofA clients and advisors needed some reassurance that performance would rebound.

Paulson delivered, vaguely. The WSJ, citing people on the call, stated that Paulson aimed to gain back losses suffered over the last year or so. He also noted that there wasn't a high number investors pulling funds and that Citigroup's (NYSE: C) $410 million withdrawal last week was unusual.

In general, Paulson didn't specify a timeline on recovery and even noted that markets as a whole didn't need to necessarily rise, just some segments needed to perform better.

Following the call, BofA isn't expected to pull its investments and has no plans to change the status of its relationship with Paulson.

In 2011, the Paulson Advantage fund lost 36 percent while the levered Advantage Plus fund dropped over 50 percent. The funds are down 13 percent and 18 percent in 2012, respectively.

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