By Bei Hu
From Bloomberg News
Monday, January 20, 2013
http://www.bloomberg.com/news/2013-01-21/pacific-group-to-convert-one-th...
The Pacific Group Ltd., founded by a former PaineWebber Inc. trader,
is converting one-third of its hedge-fund assets into physical gold, betting
that prices will go up as governments print more money to pay off debt.
The Hong Kong-based asset manager plans to take delivery of $35
million worth of gold bars that can be traded on the London Bullion Market
Association and other international markets, William Kaye, its founder and
chief investment officer, said in a telephone interview on Jan. 18. It has
secured vault space at Hong Kong International Airport to store the gold, he
said.
Investors disillusioned with government money printing to service
"insurmountable" public debt may seek alternatives to fiat
currencies, Kaye said. Asset managers, including Soros Fund Management LLC,
Paulson & Co., and Sprott Inc., are betting on
the precious metal even after a 12-year rally has cemented the longest bull
market in at least nine decades.
"Gold, the way we look at it, is anywhere from being undervalued
to being seriously undervalued," Kaye said. "We're in the early
stages, in our judgment, of what would likely be the world's largest short
squeeze in any instrument."
Pacific Group's $95 million Greater Asian Hedge Fund, which started
trading in 2001, returned 2.8 percent last year, taking the cumulative net
return since its February 2000 inception to 195 percent. It suffered two down
years in 2008 and 2011, according to its December 2012 newsletter.
The Pacific Group has just converted the first tranche of such
investments, buying gold bars from local refineries, Kaye said without giving
the exact value of the delivery.
Kaye was a manager of the arbitrage department of PaineWebber in New
York and also worked in the mergers and acquisitions department of Goldman
Sachs Group Inc., according to a biography posted on his company's website.
In 1991, he set up the Pacific Group, which also has made private-equity
investments.
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By Bei Hu
From Bloomberg News
Monday, January 20, 2013
Read the rest of the article here
http://www.bloomberg.com/news/2013-01-21/pacific-group-to-convert-one-th...
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