December 14, 1955 (age 57)
Queens, New York, U.S.
|Residence||Manhattan, New York, U.S.
Southampton, New York, U.S.
|Alma mater||New York University (BSc)
Harvard University (MBA)
|Occupation||Founder and President of Paulson & Co.|
|Salary||$4.9 billion (2010)|
|Net worth||$11.2 billion (March 2013)|
|Spouse(s)||Jenny Zaharia Paulson (m. 2000)|
Paulson became a billionaire by short-selling subprime mortgages in 2007 and made $3.7 billion that year. In 2010, he beat a hedge-fund record by making nearly $5 billion. His fortune was made largely from the collapse of mortgage backed securities market.
In 2011, he made losing trades in Bank of America, Citigroup and the fraud-suspected China-based Canadian-listed company, Sino-Forest Corporation. His flagship fund, Paulson Advantage Fund, was down over 40% as of September 2011. During that same time, Paulson had invested most of his personal fortune in gold, and it had grown by $3.1 billion from September 2010 to September 2011.
Early life and education
Paulson was born in 1955 in Queens, New York, the son of Alfred G. Paulson (November 22, 1924 - July 24, 2002) and Jacqueline Paulson (née Boklan born 1926).
His father was born Alfredo Guillermo Paulsen in Ecuador to Alfredo Paulsen Moulis, who served as governor of Guayas Province, and Zoila María Andrade. Alfredo's father was of half Norwegian and half French descent while his mother was Ecuadorian. Alfredo was orphaned at fifteen and moved to Los Angeles with his younger brother Alberto at age sixteen. He did odd jobs for several years and then enlisted in the Army where he served and was wounded in Italy during World War II. He later changed his surname from Paulsen to Paulson.
His mother was the daughter of Jewish immigrants from Lithuania and Romania who had moved to New York City. Jacqueline met Alfred while they both attended UCLA. They wed and moved to New York City where Alfred worked at Arthur Andersen and later as the CFO at public relations firm Ruder Finn. John was the third of four children born to the couple (Theodora, William, John and Julia).
John grew up in the Le Havre apartment complex in Queens, a thirty-two-building, 1,021-apartment, twenty-seven-acre development featuring two pools, a clubhouse, a gym, and three tennis courts. His family later moved to a modest home in Beechhurst, Queens. He attended a series of local public schools, where he entered a program for gifted students. Although his father was not ethnically Jewish and an atheist, he attended synagogue with his family at the Whitestone Hebrew Centre in Whitestone, New York. Paulson did not find out that his father was not Jewish until he was twelve. Despite his upbringing, Paulson listed in his yearbook at Bayside High the "Jesus club" and the "divine light club" among his interests during his senior year.
In 1973, Paulson entered New York University (NYU). As a freshman, he studied creative writing, worked in film production, and took philosophy courses. He soon lost his interest in his studies and his grades suffered. His father, sensing that he needed a change, proposed that his son take a summer trip. He bought him an airplane ticket to South America and that summer John traveled throughout Panama and Colombia before making his way to Ecuador where he stayed with an uncle.
In 1976, John returned to NYU, where he developed a reputation among his classmates for having a unique ability to boil down complex ideas into simple terms. In 1978, he received his bachelor's degree in finance summa cum laude from New York University's College of Business and Public Administration (now the New York University Stern School of Business), where he was valedictorian of his class.
Paulson subsequently attended Harvard Business School, where he received the Sidney J. Weinberg/Goldman Sachs scholarship. In 1980, Paulson graduated from HBS as George F. Baker Scholar (top 5 percent of his class) earning a MBA.
Paulson began his career at Boston Consulting Group in 1980. The work Paulson did at Boston Consulting Group was research intensive, and he excelled at it. But Paulson was not investing, just giving advice to companies, and he wanted to move to Wall Street without starting all over again from the bottom of the ladder. He then left to join Odyssey Partners where he worked with Leon Levy. Later he took a position in the mergers and acquisitions department at Bear Stearns followed by partner status at the mergers arbitrage firm Gruss Partners LP. In 1994, he founded his own hedge fund, Paulson & Co. with $2 million and one employee.
In 2008, Paulson co-wrote a Wall Street Journal op-ed piece suggesting an alternative to the Treasury Secretary's plan for stabilizing the markets. Later that year he began a new fund that lent money to investment banks and hedge funds during the mortgage crisis. Paulson "shot to fame and fortune" when his investment strategies paid off during the subprime housing market crash. His bet against the subprime mortgage bubble has been called the greatest trade ever, among others, by Gregory Zuckerman.
In 2000, he married Jenny Zaharia, a Romanian immigrant who came to the United States after her brother George, a track star in Romania, defected and moved to Queens. They have two daughters and live on the Upper East Side of New York City. They also have homes in Southampton, New York and Aspen, Colorado.
John has an older sister named Theodora Bar-El (Hebrew: תיאודורה בר אל, née Paulson; born September 29, 1947), PhD, a prominent Israeli biologist. Born in the United States, she moved to Israel in 1968 and now works at Hebrew University of Jerusalem The Alexander Silberman Institute of Life Sciences.
Wealth and philanthropy
Paulson was ranked 61 on the 2012 Forbes list of the world's wealthiest people with a net worth of $12.5 billion. He owns several homes, including one in Aspen purchased for $24.5 million in 2010, an estate in Southampton he bought for $41 million in 2008, and a 28,500-square-foot Upper East Side townhouse on East 86th Street, obtained for $14.7 million in 2004.
Between 2009 and 2011 Paulson made several charitable donations, including $15 million to the Center for Responsible Lending, $20 million to New York University Stern School of Business, $15 million to build a children's hospital in Guayaquil, Ecuador and £2.5 million to the London School of Economics for the John A Paulson Chair in European Political Economy. Calling it the largest donation ever to a park in the U.S., on October 23, 2012, Paulson donated $100 million to the nonprofit that maintains New York City's Central Park.
Political contributions and views
Paulson contributed $140,000 to political candidates and parties between 2000 and 2010, 45% of which went to Republicans, 16% to Democrats, and 36% to special interests.In 2011, Paulson donated $1 million to Mitt Romney's Super PAC Restore Our Future. His name and picture were featured in an episode of the Colbert Report, in a segment mock-honoring the 22 largest Super PAC donors.
“We pay a lot of taxes, especially living in New York ... Most jurisdictions would want to have successful companies like ours located there. I’m sure if we wanted to go to Singapore, they’d roll out the red carpet to attract us. ... We choose to stay here and then, you know, get yelled at. I think that’s misdirecting their anger at the wrong place.”
In 2008 testimony before US US House Committee on Oversight and Government Reform Paulson was asked about his low tax rate on long-term capital gains and carried interest earnings, “You make a billion dollars, yet your [tax] rate can be as low as 15 percent, ... Do you think that’s fair?” Paulson replied “I believe our tax situation is fair.” before suggesting that teachers and plumbers could also buy stocks and enjoy the same lower long term tax rates he has.
- "John Paulson - Forbes". Forbes. March 9, 2011. Retrieved May 16, 2011.
- Forbes http://www.forbes.com/profile/john-paulson/
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- McShane, Larry. "John Paulson, hedge fund heavyweight, raked in $5 billion last year, roughly $13.7 million a day". New York Daily News. January 29, 2011. Retrieved February 24, 2011.
- The Greatest Trade Ever: The Behind-The-Scenes Story of How John Paulson Defied Wall Street and Changed Financial History p.16-25
- El Universo: "Familia de migrantes con raíces europeas" December 12, 2010 (in Spanish)
- Goldiner, Dave. "Queens-born John Paulson makes fortune on home foreclosures". New York Daily News. January 16, 2008.
- Dion, Don. "Fund Lessons From John Paulson". The STREET. October 10, 2009.
- New York Times: "Paid Notice: Deaths PAULSON, ALFRED G." July 25, 2002
- Ahuja, Maneet. The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds. John Wiley & Sons, 2012.
- Paulson, John. "The Public Deserves a Better Deal". Wall Street Journal. September 26, 2008.
- Yahoo news Paulson Loses More Sept Fund Now Off 47%, Svea Herbst-Bayliss, Oct 8 2011, Retrieved Oct 2011
- "Top 10 greatest trades of all time". International Business Times. 6 January 2011. Retrieved 26 March 2012. "Paulson does indeed deserve the title of having made the greatest trade ever."
- Zuckerman, Gregory (2009). The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History. New York: Crown Publishing Group. ISBN 978-0-385-52994-5. Retrieved 26 March 2012.
- The Greatest Trade Ever: The Behind-The-Scenes Story of How John Paulson Defied Wall Street and Changed Financial History p.35
- The Bucharest herald: "Jenny Paulson, wealthiest Romanian woman in the world. Her wealth stands at 7 billion dollars" November 22, 2011
- John Paulson's Very Bad Year By Sheelah Kolhatkar| businessweek.com| 28 June 2012
- Kerpen, Phil. "SEC Probe Shouldn't Stop With Goldman Sachs". FOXNews.com. April 20, 2010.
- "Hedge Fund Founder John A. Paulson Gives $20 Million to NYU Stern". New York University Leonard N. Stern School of Business. November 12, 2009.
- Kroll, Luisa."John Paulson Pledges $15 Million In Ecuador". Forbes. November 23, 2010.
- Campaign Contribution Search: John Paulson. Federal Election Commission data via NEWSMEAT. February 7, 2011.
- "Who’s Financing the ‘Super PACs’". New York Times. February 1, 2012.
- "America's Biggest Super PAC Donors" The Colbert Report February 2, 2012.
- Interview: "Excellent timing: Face to Face with John Paulson," (Pensions & Investments)
- "The man who made too much" (Portfolio magazine)
- John Paulson-related articles at The New York Times
- Interview and Profile (Hedge Fund News)
- John Paulson & Co 2011 Year-End Firm Letter
- John Paulson Latest Portfolio Holdings