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John Paulson Said to Have Made $5 Billion in 2010 as Funds Rose

Billionaire Investor John Paulson
John A. Paulson, president of Paulson & Co. Photographer: Rick Maiman/Bloomberg

Jan. 28 (Bloomberg) -- John Paulson, whose Paulson & Co. hedge fund made $15 billion betting against subprime mortgages in 2007, earned about $5 billion last year, according to a person with knowledge of the firm.

Executives and employees hold $14.9 billion, or 42 percent, of the funds’ $35.9 billion in assets, according to a performance report sent to clients this month. Most of that belongs to Paulson, who has reinvested his gains, after taxes and personal expenses, back into the funds since opening the firm in 1994, the report said. The manager earned $3.7 billion in 2007, according to Alpha magazine.

Paulson’s gain includes his portion of the 20 percent performance fee the firm collected on its 2010 gross profit of $8.4 billion, said the person, who asked not to be named because the results weren’t public. Thirty of the 115 employees are partners who share in New York-based Paulson & Co.’s revenue, according to the report.

Paulson, 55, benefited last year from his stake in the gold-denominated share classes of his funds, whose gains were at least double those of the comparable, dollar-denominated shares after a 30 percent jump in the precious metal. The gold classes of the firm’s four strategies rose 30 percent to 46 percent.

One hundred seventy-eight clients, representing 38 percent of the firm’s assets, are invested in the gold share classes, the report said.

Paulson’s 2010 gain was reported earlier today in the Wall Street Journal.

To contact the reporters on this story: Katherine Burton in New York at kburton@bloomberg.net; Saijel Kishan in New York at skishan@bloomberg.net.

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net.

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