John Paulson

John Paulson
Born	John Alfred Paulson 14 12, 1955
Birthplace	New York City, U.S.
Nationality	American
Occupation	Hedge fund manager, investor
Known for	Founder of Paulson & Co.; shorting subprime mortgage market in 2007
Education	Harvard University (MBA)
Children	3

John Alfred Paulson (born December 14, 1955) is an American billionaire hedge fund manager and the founder of Paulson & Co., a New York-based investment management firm established in 1994. He rose from relative obscurity in the financial world to international prominence in 2007, when he used credit default swaps to bet against the United States subprime mortgage lending market — a trade that earned him nearly $4 billion personally and generated approximately $15 billion in profits for his funds. The trade, later dubbed "The Greatest Trade Ever" in a book of the same name by Gregory Zuckerman, transformed Paulson from what one account described as "an obscure money manager into a financial legend." In 2010, Paulson earned $4.9 billion, making him one of the highest-earning hedge fund managers that year. Beyond finance, Paulson has been active in philanthropy and political life, serving as a prominent donor and adviser. He has been described as "one of the most prominent names in high finance."

Early Life

John Alfred Paulson was born on December 14, 1955, in the New York City borough of Queens. His father, Alfred G. Paulson, was of European descent. Alfred G. Paulson died in July 2002. Paulson grew up in Queens, a borough known for its middle-class and working-class neighborhoods, before pursuing higher education in business and finance. His upbringing in New York City would later inform his deep connections to the city's financial industry.

Education

Paulson attended New York University, where he earned a Bachelor of Arts degree. He subsequently attended Harvard Business School, where he earned a Master of Business Administration (MBA). His academic background at two of the most recognized institutions in business education provided the foundation for his career in investment management. Paulson maintained ties to NYU throughout his career, becoming a major donor to the university and serving as a board member of the NYU Stern School of Business.

Career

Early Career and Founding of Paulson & Co.

Before founding his own firm, Paulson worked in various roles within the financial industry, gaining experience in mergers and acquisitions and investment management. In 1994, he established Paulson & Co., a New York-based investment management firm. In its early years, the firm focused on merger arbitrage — a strategy involving the buying and selling of stocks of companies involved in mergers and acquisitions to profit from price discrepancies. For over a decade, Paulson & Co. operated as a relatively small and lesser-known hedge fund, managing modest sums compared to the industry's largest players.

The Subprime Mortgage Trade (2005–2008)

Paulson's career-defining moment came in the mid-2000s, when he identified what he believed to be a massive bubble in the United States housing market. In 2005, while Wall Street broadly maintained confidence that housing prices could not experience a nationwide decline, Paulson began studying the subprime mortgage market closely. Ratings agencies at the time dismissed the possibility of widespread defaults, and banks continued to generate large profits from mortgage-backed securities.

Paulson devised a strategy to profit from the anticipated collapse by purchasing credit default swaps — financial instruments that function essentially as insurance contracts against the default of debt securities. By buying credit default swaps on pools of subprime mortgages, Paulson was effectively betting that these mortgages would fail. In 2006, he launched two dedicated funds to execute this strategy: the Paulson Credit Opportunities Fund and the Paulson Credit Opportunities Fund II.

When the housing market began to deteriorate in 2007 and subprime mortgage defaults surged, Paulson's positions generated extraordinary returns. His funds earned approximately $15 billion in profits from the trade, and Paulson personally earned nearly $4 billion that year alone. The scale of the profits was unprecedented in the hedge fund industry. The trade transformed Paulson, as one account described, "from an obscure money manager into a financial legend."

The trade attracted intense media scrutiny and public interest. It was later chronicled in detail by Wall Street Journal reporter Gregory Zuckerman in the 2009 book The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History. The book described how Paulson and his team identified the vulnerability of the subprime market and executed their strategy despite skepticism from much of the financial establishment.

Paulson's trade also became a subject of regulatory controversy. In 2010, the U.S. Securities and Exchange Commission filed a civil fraud lawsuit against Goldman Sachs related to Abacus 2007-AC1, a synthetic collateralized debt obligation (CDO) that Goldman had structured and marketed. The SEC alleged that Goldman had allowed Paulson & Co. to influence the selection of mortgage securities included in the CDO without disclosing to investors that Paulson intended to bet against the instrument. Goldman Sachs settled the case for $550 million. Paulson & Co. was not named as a defendant in the case.

Post-Crisis Investments and Performance

Following his success with the subprime trade, Paulson became one of the most closely watched investors on Wall Street. His assets under management grew substantially as investors sought to participate in his future trades. In 2010, Paulson earned $4.9 billion, again ranking among the highest-earning hedge fund managers in the world.

However, Paulson's post-crisis investment record was more mixed. He made large bets on gold, establishing a dedicated gold fund, and invested heavily in several individual companies across various sectors. Some of these investments generated significant losses. Paulson's gold fund suffered steep declines in years when gold prices fell, and several of his equity positions underperformed.

Despite these setbacks, Paulson & Co. continued to manage billions of dollars in assets and remained an active participant in the market. In the 2020s, Paulson's 13F filings with the SEC continued to draw attention from market analysts and financial media. In the third quarter of 2025, the firm made a significant increase in its position in Bausch Health Companies Inc. In the fourth quarter of 2025, filings showed changes in the firm's position in Madrigal Pharmaceuticals Inc.

Mining and Industrial Investments

Paulson also established positions in the mining and natural resources sector. In October 2025, one of his investment positions — a stake in Trilogy Metals, a small mining company — generated a significant windfall after the company's share price tripled following news of a government investment in the firm.

Paulson's industrial interests have also drawn public scrutiny. In February 2026, workers at a Conn-Selmer musical instrument factory in Ohio criticized Paulson after learning of plans to close the plant and move production to China. The criticism was notable given Paulson's public advocacy for domestic manufacturing and his support for trade policies aimed at reducing offshoring. The Guardian reported that workers decried the plan after Paulson had "painted himself as advocate for domestic manufacturing."

Political Activity and Advisory Roles

Paulson has been a significant political donor, primarily to Republican candidates and causes. His political contributions have been tracked by various outlets over the years.

Paulson was an early and prominent supporter of Donald Trump's political activities. In August 2016, he was named as a member of Trump's economic advisory team during the presidential campaign. The Washington Post identified Paulson among a group of ultra-wealthy individuals assembled to advise Trump on economic policy.

Following Trump's election in November 2016, Bloomberg reported that Paulson's early support for Trump positioned him for potential influence and profit. The outlet described the political connection as "Paulson's Big Long," drawing an analogy to his famous short trade, characterizing his early backing of Trump as a calculated bet that yielded "power and profit." Vanity Fair also reported that Paulson had cultivated a close relationship with Trump and was positioned to seek favorable policy outcomes.

Forbes identified Paulson as "one of Donald Trump's earliest supporters on Wall Street" in its October 2025 reporting on the Trilogy Metals windfall.

Personal Life

Paulson resides in New York City. He has owned a townhouse at 9 East 86th Street on the Upper East Side of Manhattan, a property that has been noted in real estate and architectural coverage of the city.

Paulson has three children. His former wife, Jenny Paulson, is of Romanian descent. The Bucharest Herald described Jenny Paulson as one of the wealthiest Romanian-born women in the world, noting her connection to the Paulson family fortune, which was estimated at approximately $7 billion at the time of reporting.

In September 2025, Paulson's name appeared in coverage related to Jeffrey Epstein's contact list. Washington Square News, NYU's student newspaper, reported that Paulson was identified as "one of the billionaires" listed in Epstein's so-called "black book." The report noted Paulson's position as a major NYU donor and Stern School of Business board member. Appearing in Epstein's contact list does not imply involvement in illegal activity; the contacts included a broad range of public figures.

Philanthropy

Paulson has engaged in significant philanthropic activity, directing substantial donations to educational institutions and public spaces.

Central Park Conservancy

In October 2012, Paulson donated $100 million to the Central Park Conservancy, the nonprofit organization that manages Central Park in Manhattan. The donation was one of the largest gifts ever made to a New York City park. The New York Times reported the gift as a major contribution to the maintenance and preservation of the iconic public space.

New York University

Paulson has been a major donor to New York University, his undergraduate alma mater. He has served on the board of the NYU Stern School of Business and has contributed significant funds to the university. His position as one of NYU's most prominent donors has been the subject of media attention.

Hebrew University of Jerusalem

Through the Paulson Foundation, Paulson and his family have made substantial donations to the Hebrew University of Jerusalem for STEM (science, technology, engineering, and mathematics) programs. As of early 2026, the Paulson Foundation's cumulative donations to the university totaled $46 million, representing one of the institution's largest-ever gifts. The funds were directed toward programs at the university's Givat Ram campus.

Recognition

Paulson's 2007 trade against the subprime mortgage market is considered one of the most profitable trades in financial history. The trade was the subject of Gregory Zuckerman's 2009 book The Greatest Trade Ever, which provided a detailed account of how Paulson identified the housing bubble and executed his strategy. The book brought wide public awareness to Paulson's role in the financial crisis era.

Paulson has consistently appeared on Forbes lists of the wealthiest Americans and the world's billionaires. As of August 2025, Forbes estimated his net worth at approximately $3.8 billion. He has been named among the top-earning hedge fund managers in multiple years, most notably in 2007, when he earned nearly $4 billion, and in 2010, when he earned $4.9 billion.

His investment strategies and portfolio moves continue to be closely tracked by financial analysts and media outlets, with his firm's quarterly 13F filings regularly generating coverage in outlets such as Yahoo Finance, Insider Monkey, and other financial publications.

Legacy

Paulson's place in financial history rests primarily on his 2007 subprime mortgage trade, which remains a defining event in the annals of hedge fund investing. The trade demonstrated both the potential profits available to investors who correctly identified systemic risks in financial markets and the role that complex financial instruments such as credit default swaps played in the 2007–2008 financial crisis. His success contributed to broader public debates about the structure of financial markets, the role of hedge funds, and the ethics of profiting from economic downturns that caused widespread harm to homeowners and the broader economy.

As a philanthropist, Paulson's $100 million donation to Central Park and his multi-million-dollar contributions to NYU and the Hebrew University of Jerusalem placed him among New York City's most significant individual donors to public and educational institutions.

His political involvement — particularly his early support for Donald Trump and his role on Trump's economic advisory team — positioned him as one of the most politically active figures in the hedge fund industry. The intersection of his financial interests, political activity, and public advocacy on issues such as domestic manufacturing has continued to generate scrutiny, as illustrated by the 2026 controversy over the closure of the Ohio Conn-Selmer plant.

Paulson & Co. has remained active in the investment management industry, though the firm's assets under management have declined from their peak. Paulson's career trajectory — from a modest merger-arbitrage fund manager to one of the wealthiest and most prominent investors of his generation — is frequently cited in discussions of the hedge fund industry and the role of individual investors in global financial markets.