From Grokipedia
Full articleJohn Alfred Paulson (born December 14, 1955) is an American billionaire hedge fund manager and philanthropist renowned for founding Paulson & Co. in 1994 and orchestrating one of the most lucrative trades in financial history by shorting subprime mortgage securities ahead of the 2008 housing collapse.
A summa cum laude graduate in finance from New York University Stern School of Business in 1978 and a Baker Scholar MBA recipient from Harvard Business School, Paulson built his early career in mergers and acquisitions at Bear Stearns and as a partner at Gruss Partners before launching his firm with a focus on merger arbitrage and credit strategies. His 2007 bet against overvalued mortgage-backed assets generated roughly $15 billion in profits for Paulson & Co. and $3.7 billion personally, capitalizing on empirical indicators of a housing bubble fueled by lax lending and securitization excesses that mainstream institutions largely overlooked.
Paulson's subsequent investments included heavy allocations to gold and distressed assets, though some positions like bets on European banks yielded losses amid post-crisis volatility; the firm returned capital to outside investors in to operate as a family office managing his personal fortune, estimated at $4 billion in 2025. A prolific donor, he has contributed over $400 million to Harvard's engineering school, $100 million to NYU for performing arts facilities, and $100 million to the Central Park Conservancy, prioritizing STEM education and urban preservation amid critiques of elite institutions' resource allocation.
In brief
John Paulson ran a merger-arbitrage firm that most people had never heard of until he bought protection on mortgage securities. The housing collapse made those positions legendary.
Later years were harder, as they often are after a perfect trade. The 2007 book still sits on every hedge-fund syllabus.
