John Paulson – The Latest Hedge Fund Magnate To Transition to a Family Office
July 08, 2020
“With one chapter closing, a new one is beginning for me and I look forward to continuing as an active participant in financial markets.”
– John Paulson’s latest letter to investors
John Paulson shuns interviews and famously tries to avoid the media spotlight, but his announcement last week that he is closing up shop at John Paulson & Co., once one of the world’s largest hedge funds, to instead manage his own fortune in a family office structure found him leading headlines worldwide.
At its peak, Paulson & Co. ran $38 billion in a risk arbitrage strategy, however, assets under management reportedly had fallen to a mere $9 billion by 2019 due to underperformance. His success peaked around 2007-2008 when a bet on credit default swaps earned his fund some $20 billion in profits, but it proved challenging for him to keep up that same momentum. Paulson himself will be fine, however, as The Bloomberg Billionaires Index reports that his personal net worth is around $4.4 billion.
The move to a family office is a natural transition for Paulson and mirrors the paths of billionaire hedge fund managers Louis Bacon, David Tepper and George Soros, among others. Now 64 years old, Paulson is well-positioned to manage his own money without the added stress of outside investors and timing is optimal with the current global health crisis disrupting financial markets. Paulson will go down in history as one of the biggest names on Wall Street as he continues to actively bet on the market via his new family office.
Indeed, it has been a good run for Paulson, who started his career at Boston Consulting Group in 1980 after graduating from NYU and earning an MBA at Harvard. When he started his hedge fund in 1994, he had just one employee. Perhaps, in his view, that is a good idea again right now.