John Paulson

/John Paulson
John Paulson 2015-06-29T02:54:24+00:00

John Paulson -Net Wort $11.2 billion is hedge fund  Paulson & Co founder.

john-paulsonJohn Alfred Paulson was born December 14, 1955. John Paulson is hedge fund manager and billionaire who heads Paulson & Co., a New York-based investment management firm he founded in 1994. He has been called “one of the most prominent names in high finance” and “a man who made one of the biggest fortunes in Wall Street history”.

His prominence and fortune were made in 2007 when he earned “almost $4 billion” personally and was transformed “from an obscure money manager into a financial legend” by using credit default swaps to effectively bet against the U.S. subprime mortgage lending market. In 2011, John Paulson earned “$4.9 billion” according to Business Insider. As of March 2014, Forbes estimates his net worth at $13.5 billion.

John grew up in the Le Havre apartment complex in Queens. His family later moved to a modest  home in Beechhurst, Queens. He attended local public schools, where he entered a program for gifted students. He attended synagogue with his family at the Whitestone Hebrew Centre but also listed the “Jesus club” and the “divine light club” among his interests in his yearbook at Bayside High School. Paulson did not find out that his father was not Jewish until he was twelve.

In 1973, Paulson entered New York University (NYU). He studied creative writing, film production, and philosophy but grew bored with school. He traveled to South America and stayed with a wealthy uncle in Ecuador which he told author  Gregory Zuckerman, brought him “back to liking money again”. Traveling to Quito he started his first business venture selling cheap children’s clothing to his father back in New York who successfully marketed the clothing to several department stores. Later, Paulson and his father branched into wood parquet flooring.

Paulson began his career at Boston Consulting Group in 1980 where he did research, providing advice to companies. Ambitious to work in investment on Wall Street, he left to join Odyssey Partners where he worked with Leon Levy. He moved on to Bear Stearns working in the mergers and acquisitions department, and then to Gruss Partners LP, where he made partner.
In 1994, he founded his own hedge fund, Paulson & Co. with $2 million and one employee located in office space rented from Bear Stearns on the 26th floor of 277 Park Avenue. The firm moved to 57th and Madison in 2001. By 2003, his fund had grown to $300 million in assets.

Paulson and his company specialize in “event-driven” investments—i.e. in mergers, acquisitions, spin-offs, proxy contests, etc.—and he has made hundreds of such investments throughout his career. Many of the events involved risk arbitrage—which has been described[by whom?] as waiting “until one company announces that it’s buying another, rushing to purchase the target company’s shares, shorting the acquirer’s stock (unless it’s a cash deal), and then earn the differential between the two share prices when the merger closes”. An example of proxy event investment Paulson made was during Yahoo’s proxy contest in May 2008, when Carl Icahn launched a proxy fight to try to replace Yahoo’s board.

In 2006 John Paulson organized a new fund (Paulson Credit Opportunity Fund) betting against bonds backed by subprime mortgages using credit default swaps. Paulson “shot to fame and fortune” when his investment strategies paid off during the subprime housing market crash. His bet against the subprime mortgage bubble has been called “the greatest trade ever” by Gregory Zuckerman who wrote a book by that title about it, but criticized by others. Paulson’s involvement in the Abacus deals resulted in Goldman Sachs paying a $550 million penalty, the largest ever paid by a Wall Street firm.

In 2010, he set another hedge fund record by making nearly $5 billion in a single year. However, in 2011, he made losing investments in Bank of America, Citigroup and the fraud-suspected China-based Canadian-listed company, Sino-Forest Corporation. His flagship fund, Paulson Advantage Fund, fell sharply in 2011. Paulson has also become a major investor in gold.

In 2000, he married Jenny Zaharia, in an Episcopalian Church in Southampton, New York. Jenny was a Romanian immigrant who came to the United States after her brother George, a track star in Romania, defected and moved to Queens.
They have two daughters, Giselle and Danielle, and live most of the year in a 28,500-square-foot Upper East Side townhouse on East 86th Street, obtained for $14.7 million in 2004. Other homes he owns include one in Aspen purchased for $24.5 million in 2010, an estate in Southampton he bought for $41 million in 2008.