Bloomberg Billionaires Index

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#245 John Paulson $6.63B

Random fact: Some clients thought 66 percent gain in February 2007 was misprint.

Overview

Paulson is founder and owner of Paulson and Co., a New York-based investment adviser that manages $10 billion. The hedge fund focuses on four main strategies, including global merger and event arbitrage and is probably best-known for making $15 billion in 2007 on a bet against mortgage bonds, often called the greatest trade ever.

As of Oct. 17, 2017:
Last change No change
YTD change +$884M (+15.4%)
Industry Finance
Biggest asset Paulson Hedge Funds
Citizenship United States
Age 61
Wealth Self-made
View net worth over:   Max 1 year 1 quarter 1 month 1 week

Relative Value

John Paulson's net worth of $6.63B can buy ...

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troy ounces of gold
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barrels of crude oil

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of the GDP of the United States
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of the total wealth of the 500 richest people in the world
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of the top 100 U.S. college endowments
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of the top 200 U.S. executives’ total awarded compensation
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of U.S. existing home sales
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times the median U.S. household income

Latest News

Net Worth Summary

Cash
Private asset
Public asset
Misc. liabilities
Confidence rating:

The majority of Paulson's fortune is derived from his assets in hedge funds he owns and manages through Paulson & Co. The funds focus on four main strategies, according to its 2017 Form ADV filing with the Securities & Exchange Commission: global merger and event arbitrage, financial restructuring, real estate and credit opportunities in financial instruments.

Paulson probably had about $7.2 billion invested in the funds as of May 2017, based on information reported in Paulson & Co.'s 2017 Form ADV, which reports that 80 percent of its assets are owned by employees. That same ownership percentage is applied to another entity, Paulson Management, which hasn't updated its filing for 2017. This change in the methodology was made on June 1, 2017 and resulted in a $900 million increased to his net worth.

Paulson's personal stake is about 90 percent of insider assets, according to a person familiar with the company holdings who asked not to be indentified because the company is closely held.

Paulson is the sole owner of the hedge fund, according to the ADV filings. The entity is valued using $10 billion in assets as reported by Bloomberg News, less Paulson's personal stake. The adjusted AUM is then used to compare to the average market capitalization-to-assets under management multiple of publicly traded peer companies Och-Ziff Capital Management and Man Group. A 25 percent key-man discount is also applied.

Charitable assets with a fair market value of $754 million held by the Paulson Family Foundation are managed by his hedge fund, according to the foundation's 2014 tax return. These assets are deducted from the billionaire's net worth to avoid crediting Paulson with philanthropic assets that may be defined as insider assets in Form ADV filings.

The billionaire declined to comment on his net worth, through spokesman Armel Leslie. Leslie also declined to comment on the June 1 adjustment of the methodology.

Biography

Birthdate: 12/14/1955
Family: Married, 2 children
Education: 1980, Harvard Business School, MBA 1978, Finance, New York University, Graduated

John Alfred Paulson was raised in the middle class Beechhurst section of Bayside, Queens. By his own admission, Paulson was an exceptional student, finishing his undergraduate years at New York University as valedictorian and graduating near the top of his class at Harvard Business School.

After stints working in risk arbitrage at Bear Stearns, Odyssey Partners and Gruss Partners, Paulson founded Paulson and Co. in 1994, with $2 million in money from friends and family.

Paulson's adeptness at mastering new ideas enabled him to capitalize on a suggestion by one of his analysts, Paolo Pellegrini, to use credit derivatives as a way bet against on what they correctly saw as a housing bubble in the U.S. in the mid-2000s. The result: Paulson's fund earned $15 billion in 2007, 20 percent of which he personally kept. That series of investments was praised as the greatest trade ever in a book about Paulson by Gregory Zuckerberg.

The billionaire lives in New York, with residences in Manhattan and the South Fork of Long Island.

Milestones
  • 1953 John Alfred Paulson is born in Queens, New York.
  • 1978 Graduates summa cum laude from New York University.
  • 1980 Finishes in top 5 percent of class at Harvard Business School.
  • 1982 Lands job with risk arbitrage firm Odyssey Partners.
  • 1984 Becomes a managing director at Bear Stearns.
  • 1994 Starts Paulson & Co.
  • 2007 Makes prescient bet against subprime debt.
  • 2011 Advantage Plus fund loses 51 percent on U.S. recovery bet.