John D. Arnold

John Douglas Arnold, born in 1974, is an American hedge fund manager, specializing in natural gas trading. His firm, Centaurus Advisors, LLC, is a Houston-based hedge fund that specializes in trading energy products.

Enron

After graduating from Vanderbilt University, he began his career as a trader at Enron. After initially working on the Crude Oil desk, Arnold moved over to the Natural Gas Desk upon the departure of Jeff Bussan. Using their new Internet-based trading network, EnronOnline, he is credited with making three quarters of a billion dollars for Enron in 2001 and was rewarded with an $8 million bonus. One of his former colleagues dubbed him "the king of natural gas."

Centaurus

When Enron collapsed in 2002, he founded Centaurus with his previous year's bonus. His company now has as much as $3 billion in assets under management. His employees include several big name energy traders including ex-Enron CEO Greg Whalley, as well as Bill Perkins, Mike Maggi, and Conrad Goerl, previously of MotherRock.

According to Arnold, "After Enron collapsed, there was a general revaluation of credit risk among energy companies. The better credits were less willing to take on the lesser credits as counter parties. So the lesser credits found themselves with fewer counter parties willing to trade with them, even though they still needed to hedge the pricing risks in their business. Hedge funds previously had not been involved in the over-the-counter market, except for the very largest, because the other participants were reluctant to grant credit to that type of entity."

During the collapse of Amaranth Advisors, Centaurus is widely credited as being one of the major players on the other side of their position, and returning as much as 150% in 2005.

At a recent energy conference, Arnold stated that he looks "to place bets on a market that he determines is ‘biased’ ... [W]e ask ourselves can we identify what is forcing a market to price a product at an unfair value, and then, what will push it back to fair value." Arnold also referred to the speculative trading that was taking place on the unregulated over-the-counter Intercontinental Exchange (ICE) and NYMEX's Clearport Trading: "Trading never went away ... [W]hat has changed is the non-commercial type of interest ... [B]ecause of this there has never been as much investor interest ... as there is today."

During August 2008, Centaurus acquired around 10% of the shares of National Coal Corporation (NCOC).

John D. Arnold recently made a rare public speech to the CFTC (U.S. Commodity Futures Trading Commission), in which he opposed limits on financially settled trading positions but supported limits in the physical energy futures as they near expiration. As Arnold told the CFTC (in one of the few statements he made that wasn't steeped in trading jargon), "I try to buy things whenever they're trading below what [our] analysis shows to be fair value and sell things whenever our analysis shows that the forward curve is higher than our analysis of fair value."

In 2009, John Arnold is believed to have made 900 million dollars.

In Forbes magazine's 2010 list of The World's Billionaires, John Arnold ranked 212, with a net worth of $4 billion.

In 2011, he and his wife donated over 100 million dollars to different causes.

External links

• Centaurus Energy Website