Overview

John Alfred Paulson is considered as one of the greatest American Hedge Fund Managers of all time. He founded the investment management firm Paulson & Co. in 1994 which is based in New-York. Since then he works as the President and Portfolio Manager at the company.

He is well known as the man who made the highest earnings in the history of Wall Street. He is popular for his overnight transformation to a financial legend from a money manager in 2007. His trade against the U.S. Subprime earned him about $ 4 billion and established him as a reputable figure in financial circles.

Background

Early Life

John Paulson was born on December 14, 1955, in Queens, New York. His parents Alfredo  Guillermo Paulson and Jacqueline Paulson died when John was only fifteen years old. They left John and his three siblings behind. The untimely death of John’s parents made him relocate to Los Angeles with his brother at the age of 16.

Education

Before entering the investment world, John chose Sales as his career path which he soon changed. John returned to New York in 1976 and studied film production, creative writing, and philosophy at New York University. He graduated from the university in 1978. He then went to Harvard Business School on a Sidney J. Weinberg/Goldman Sachs scholarship to study Business Administration. He received his master’s degree in 1980 as a George F. Baker Scholar.

Personal Life

John married Jenny Zaharia (a Romanian immigrant) in 2000 and has two daughters Danielle and Giselle. He owns multiple real estates with the estate in Southampton being the most expensive which is worth $41 million.

Net Worth

According to Forbes, the real-time Net Work of John Paulson is $5 billion. He ranked #355 on the ‘Billionaires 2019’, #88 on ‘Forbes 400 2018’, and #4 on ‘Hedge Fund Managers 2014’ lists by Forbes Magazine. He made most of his profit in 2007 against subprime.  His own net worth crossed $15 billion during 2007 and 2008.

His firm  Paulson& Co. at its peak managed $36 billion worth funds. In recent years John and his firm have lost huge money. The real-time funds of Paulson & Co are $6 billion which is mostly John’s own capital.

Life as Philanthropist

John has been involved with various charities and charitable activities through his own Paulson Family Foundation. The foundation was launched in 2008 and since then it focuses on charities and causes in the field of community development, education and health.

John serves as a board member of New York University, the Council on Foreign Relations, Deans Advisory Board of the Harvard Business School,  the Partnership for New York City and the Economic Club of New York. The value of the Paulson Family Foundation is estimated to be $565 million. John is well known for his $100 million donations to the Central Park Conservancy, $20 million to New York University and $15 million to build a hospital in Ecuador.

Awards and Achievements

John’s firm has won Management Firm of the Year award in 2013 by Absolute Return. His firm has also won Best Event Driven Fund, Best Arbitrage Fund, and eight other awards.  John Paulson himself is named as “the greatest trader ever” by Gregory Zuckerman. He is considered the best event-driven investment strategists ever.

Investment Career

John Paulson started his finance career as a financial adviser in 1980 at Boston Consulting Group. He soon left his first company to work as an investor at Wall Street. He worked with Leon Levy during his Wall Street years. He went to Bear Stearns and worked in the mergers and acquisitions department before he was made a partner at Gruss Partners LP.

Paulson & Co.

John Paulson founded Paulson & Co.in 1994. He started the company at a rented space at Bear Stearns with a single employee and a mere $2 million. The fund earned assets worth $300 million in just 9 years. The company became a big player in 2007 by making the greatest trade in the history of the Wall Street.

Investment Philosophy

John Paulson who is best known for foreseeing the subprime mortgage crisis and earning billions has a very simple philosophy behind the successful investment phenomenon. He claims that the investors who compound and stay at more than average rates for the long term are the ones who do the best in the market.

A majority of successful investors performs the same practice. He claims that a single strategy cannot be and is not correct at all times. If one wants to be a successful trader then he has to swallow the pride and be patient.  In regards to his legendary investment in 2007, he says, such opportunities do not come around often. In order to outperform in the long term, buying low and selling high is the right strategy. And the goal is not outperforming every time.