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
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.
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.
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