New Yorker, John Paulson is the president and founder of Paulson & Co; who was born on December 14, 1955. In 2008 Trader Magazine marked him as the best trader of the world. Paulson completed his bachelors in Finance from New York Stern School of Business in 1977. In 1980, he earned an MBA from Harvard Business School by acquiring a Sidney J. Weinberg/Goldman Sachs grant and graduated as George F. Baker Scholar among the top 5% in the class.
After completing his studies he worked for one of the biggest management consultancy firms: Boston Consulting Group; where most of his work was research based. Later, he got enlisted with the Odyssey Partners. In 1984, he progressed towards the investment banking sector by joining Bear Stearn where he was appointed as the managing director of M&A. His speculations on the rise and falls of mortgage rates overwhelmed many within the league. Paulson worked as an independent aristocrat by achieving a partner status in a merger arbitrage firm known as Gruss Partners LP but eventually the partnership came to an end in 1989. Meanwhile, he celebrated several good investments in Samuel Adams brewery, nightclub, discotheque and real estate. He started his own hedge fund with $2 million in 1994 named of Paulson & Co. Many attractive investments were done after that. In 1996 a companion offshore fund Paulson International Ltd was formed, which was a leveraged version of its firm. Corresponding, he shaped four hedge firms with a motive to insure the default risk of mortgages. One of his firms The Credit Opportunities which was inaugurated in 2007 with assets of $130 million, rose to $3.2 billion within 12 months during the subrime crisis.
Paulson once wrote a proposal to The Wall Street Journal suggesting an alternative to the Treasury Secretary for stabilizing the market. His forecasts about the collapse of the mortgage turned true in 2007 when most of the Americans thought the opposite. This upraised him to fame and an overnight billionaire status by earning more than $15 billion for his hedge funds. His bet on the mortgage collapse has been known as the ‘Greatest Trade Ever’ by many. That very year he inaugurated another firm, which lent money and hedge funds to the investment banks during mortgage crisis. His flagship fund, The Paulson Credit excelled to 590% by securing another record in the same year. When his investments in agricultural commodities harvested $3.7 billion he was finally titled as the “The Sultan sub-prime” by the media. His predictions about the increase in gold rates and the survival of large banks during financial crises also turned true. He has earned a record in the hedge firm industry by making a whopping $4.9 billion in single payday. This was estimated as the largest in the history of Wall Street. Paulson’s bet against 4 of 5 biggest UK banks, including the £350m position against Barclays; £292m against Royal Bank of Scotland and the £260m one on Lloyds TSB in 2008, earned him £280m in 2009.
John Paulson Personal Info
John Paulson’s Age – 59 Years
Career Duration and Experience – 35 Years
Source of Wealth: His Hedge Fund Paulson & Co
Location: New York, USA
Occupation: Founder and President of Paulson & Co.
Net worth (March 2012): $13.7 billion
Other Achievements: #61 Forbes Billionaires, #35 Forbes 400, ranks #78 on the wealthiest person in United State and the 36th richest person in the world. His funds are the largest in the Hedge Funds.
Paulson put most of his personal fortune on gold at one point, which has reaped good rewards until 2011 when gold was rising. The hedge fund titan owns a $24.5 million mansion in Aspen, making it the most expensive single sale. He also owned a 10.44-acre property on Lake Agawam in Southampton at one point, which was worth $41.3 million. Many economists and stakeholders have estimated that Paulson earns around $2.4 million dollars per hour.
Apart from his, he has made several notable donations, which embraces $15 million to Center for Responsible Lending, $20 million to New York University Stern School of Business, $15 million to build a children’s hospital in Guayaquil, Ecuador and £2.5 million to the London School of Economics for the John A Paulson Chair in European Political Economy. Furthermore, $1 million was donated to Mitt Romney’s Super PAC Restore Our Future. He was honored as the 22nd largest Super PAC donors in an episode of the Colbert Report. During 2000 to 2010, contributions worth $140,000 were made to the political parties, and candidates, 45% went to Republicans, 16% to Democrats, and 36% to special interests. The employees of Paulson & Co. contributed around $61,050 on the John Boehner campaign.
Paulson & Co.
Founded by John Paulson; Paulson & Co (PCI) is an employee-owned hedge fund sponsor based in New York. It offers mutual investments and manages accounts for banking or thrift institutions, pension, profit-sharing plans, and corporations. Investments are made in the public equity market all around the globe while maintaining an individual client portfolio. It carries an in-house research, and its performance is marked against the S&P 500 Index. Along with fundamental analysis, it serves merger arbitrage, long/short, and event-driven strategy for investment purpose.
According to New York Times, PCI profited even during the financial crisis of 2007 by betting against synthetic collateralized debt obligations (CDOs) and earned $15 billion. In 2008, a new fund was started by PCI to unravel capital problems associated in the Wall Street by lending money to investment banks and hedge funds. Bet of $1 billion on the recovery of was also won by PCI after 2009.