American philanthropist, investor, and hedge fund manager John Paulson has managed to make quite a name for himself, besides making a lot of money. The main man at New York City’s Paulson & Company, which specializes in investment management, somehow succeeded in pulling in $4.9 billion in 2010 alone. If you aren’t familiar with hedge funds, or if you have little to no background or experience when it comes to investing, you may have never heard of the man, but those who have know that this successful, determined individual has made a name for himself in the field that will not easily be erased from the its history books.
Noted as being ‘a man who made one of the biggest fortunes in Wall Street History by Newsweek.com and ‘one of the most prominent names in high finance’ by the New York Times, Paulson founded his company in 1994, but he didn’t truly come into his fortune overnight. In fact, it didn’t find its way to him until 2007. It was then that he earned $4 billion, and at that point the ‘overnight financial sensation’ took flight. Today, Paulson is personally worth an estimated $4.2 billion in all. But there is more to this man than just dollar signs and a knack for bringing them home. In fact, he has an interesting history. For those of you who want to know a bit more about this Wall Street wizard and what makes him tick, we have compiled twenty facts that you probably don’t know about John Paulson. The information should make him a little more real, and a lot more human, than he may seem with all those greenbacks attached to his reputation. Read on.
20 Things You Didn’t Know About John Paulson
1. He’s a Native New Yorker
Born in Queens in December of 1955, Paulson had three siblings, of which he was the second-to-youngest. His parents, Alfred and Jacqueline, were Norwegian, French, and Ecuadorian. Alfred moved to Los Angeles at the age of sixteen and joined the military and fought in Italy in the World War II, where he was wounded. After marrying his wife, they moved to New York City.
2. He Must Have Gotten His Business Sense From His Father
Alfred Paulson went into business after he left the military, working for Ruder Finn as the public relations CFO; prior to that he was employed by Arthur Anderson, an accounting firm out of Chicago. Certainly he shared some of his experience with his son, or perhaps John simply watched his father and listened closely, because he managed to take up the mantle quite well.
3. He Excelled In His College Studies
John Paulson majored in business at NYU, where he was hailed as class valedictorian. After that he was awarded the Sidney J. Weinberg/Goldman-Sachs scholarship, which enabled him to earn his MBA as a George F. Baker scholar from Harvard Business School. He graduated in the top five percent of his class, which is no simple feat, by any means.
4. His First Professional Steps
Initially, Paulson started out his career doing research for the Boston Consulting Group in 1980, but he had his heart set on hitting Wall Street. So, he left BCG and took up employment with Odyssey Partners. From there he went to Bear Stearns, where his main focus was mergers and acquisitions, and finally he landed at Gruss Partners LP, becoming a partner of the company himself. Finally, in 1994, Paulson got his hands on one million dollars and rented office space from Bear Stearns on the 26th floor of their building, starting his own business, Paulson & Co., with only one employee. But before long he was able to move the company to a location at Madison Avenue and 57th St in 2001, and by 2003 Paulson & Co. had raked in $300 million.
5. Family Life
When he isn’t at the office making his billions, Paulson has a family at home to spend time with and consider. He has been married to his wife Jenny since 2000, and they have two daughters, Giselle and Danielle. It doesn’t appear that his work has interrupted his marriage too much, considering the couple have been together nearly 20 years.
6. Special Skills
Apparently John Paulson has a knack for being able to both impending financial profit and crisis. This gift has obviously helped him, considering he made his billions by quickly taking action after the 2007 housing crash and shorting subprime mortgage securities. More can be read about his talent for seemingly reading the financial future in ‘The Greatest Trade Ever Made’, by Greg Zuckerman.
7. He Is Also a Philanthropist
Among his noted charitable donations are a $15 million donation toward building a maternity hospital in Ecuador, another $15 million to the Center for Responsible Lending, and $20 million to the Stern School of Business, which is part of New York University, and is also a school that John attended.
8. What Was the Highest Hedge Fund Dollar Amount Managed by Paulson?
Paulson & Co. hedge funds did reach an astronomical peak of $36 billion at one point, but according to Forbes, 2018 saw them come down fairly drastically, sinking to $6 billion. To you and I these are massive numbers, both of them. But in the middle of the hedge fund game this is a very substantial drop. Regardless, the numbers are good at $6 billion, but we all know that $36 billion would be far better.
9. Which Lists of Forbes have Paulson & Co. Managed to Make?
Paulson & Co. has definitely not an amateur when it comes to the Forbes’ List to-do. In all, the company has managed to earn good spots on three lists, which are as follows, in no particular order:
- #4 on the Hedge Fund Managers list of 2014
- #168 on the Forbes’ 400 of 2019
- #255 on the 2019 Forbes’ Billionaires list
So, they’ve paid their dues and earned the recognition deserved by those in the business who know the business best. Great job, Paulson & Co.!
10. He Donated To the Above Charities, But He Didn’t Stop There…
On June 3, 2015, John Paulson announced plans to make a charitable gift that was larger than any ever received by the receiver. The receiver happened to be Harvard, and John pledged a donation of $400 million to the reputable college. It was the largest gift every received by the institution, which has been running for nearly four centuries.
11. His Very First Business Was NOT Paulson & Co.
During the 1970s Paulson made a decision to visit Ecuador, taking time off from his collegiate studies to do so. Pursuing the path of the entrepreneur, Paulson ended up in Quito, and it was there he opened his very first legitimate business: The exportation of children’s wear from Ecuador to New York City. Unfortunately, he moved quickly on because he didn’t see it as being as profitable as he wanted it to be.
12. Has He Ever Known Hard Times?
According to an article on Medium, 2011 saw the Advantage Plus fund lose half its worth due to the United States experiencing failed economic recovery. Then, in 2012 he suffered losses on his Gold Fund. In all, the firm was hit with falling numbers that brought its AUM down to approximately $20 billion.
13. His Specific Philosophies Regarding Investinh
Paulson stated the following in 2015:
“I really picked up my investment philosophy from Marty and his father, Joseph Gruss. He had two sayings that guided me in going forward.”
He continued. “The first was, ‘Watch the downside; the upside will take care of itself. That’s a very important guiding philosophy for me. Our goal is to preserve principal, not to lose money. Our investors will forgive us if our returns don’t beat the S & P in a given year, but we are not forgiven if we have significant draw downs.’ The other saying really drives the same point home from a different angle. ‘Risk arbitrage is not about making money, it’s not about losing money. If you can minimize the downside, you get to keep all your earnings, and that helps performance.’” —John Paulson
14. More About His Company
Paulson & Co. Inc. is recognized as an investment management company with specialties in credit strategies, global mergers, and event arbitrage. Not only do they have the New York City location, which is the headquarters, but there are also satellite locations in Dublin, Ireland and London, England. They have been recognized with several awards and have been given accolades for during its 20-plus-year run in the business, including awards for the Best Event Driven Fund, Management Firm of the Year, and Best Arbitrage Fund. These awards were given as well as eight others, the
Absolute Return awards. The collection they have received for recognition for their work in the business makes them the highest award-winning of its kind.
15. The Billionaires’ Index by Bloomberg
The Billionaires’ Index, which is published by Bloomberg, provides thorough profiles for five-hundred of the richest individuals on the planet. The index assists the user in tracking billionaires and their fortunes, track returns, and seeing how much movement forward or backward is being made by each. Sandwiched snuggly between Friede Springer and Andre Guryev, at #454 and #456 respectively, is #455, John Paulson, with a net worth of $4.40 billion.
16. He Doesn’t Always Go By ‘John’
No, he doesn’t. His friends call him ‘JP’ (for John Paulson), a name which was given to him in college and easily stuck with him in the following years. So, if you meet the man and he tells you to call him JP, chances are you are in his inner circle of either employees, friends, family, or all three.
17. A Personal Quote That He Is Known For
“There is a chance…a very good chance..that gold will be the next NASDAQ.” This was yet another Paulson prediction that was proven to be spot-on in the end.
18. How Zuckerman’s Book on Paulson Came To Be
The book ‘The Wall Street Wizard’ by Greg Zuckerman was released in 2009, and it detailed Paulson’s strategic approach when dealing with banks such as Bear Stearns and Goldman-Sachs. The approach was profoundly successful, which prompted author Zuckerman to lay out the basics of Paulson’s strategy for others to study on and learn from. Paulson’s huge success and personal financial gain intrigued Zuckerman, and he could not resist the urge to get it down in writing so that it could be shared with others
19. His Support of Politics, or Lack Thereof
John Paulson claims membership to the Republican party, but he contributes a bit of money to each and every campaigning party on the ballot. Between 2000 and 2010, Paulson contributed $140k to candidates and their parties. It broke down as follows: 36% went to ‘Special Interests’, including the campaign of John Boehner, the former Speaker of the House; 45% was contributed to the Republican Party and 16% was given to the Democratic Party. Depending on how you look at it, or which party you belong to, he could appear very generous or very stingy, but the point is that he gave to all.
20. Where Do the Paulsons Take Up Residence?
Well, they certainly aren’t limited to a solitary home. For a large portion of each year Jenny and John reside with their daughters Danielle and Giselle in New York’s Upper East Side; their residence there is a 28,500 square-foot townhouse which is located on E. 86th St. The home set them back approximately $14.7 million when they purchased it in 2004. Another home, a Southampton estate, was purchased in 2008 for $41 million, and yet another, bought in 2010, is in Aspen, and it cost the Paulsons $24.5 million. Seems they are sitting comfortable indeed.
So, now we know a bit more about billionaire hedge fund director and business owner John Paulson than we knew before. Now that you know who he is and what he does, perhaps it’s time to start paying attention to his predictions and taking advantage of the gift that he seems to so willingly share with others. You never know; you may wake up one day and find yourself sleeping in a pile of money totaling four-billion-dollars. More than likely, you wouldn’t want to get out of ‘bed’ at all!