Wednesday, April 09, 2008

John Paulson: $3 billion man

In an update to Trader Monthly's recent rundown of Wall Street's top earners in 2007, the Financial Times ran an article focused on the man at the head of that list: hedge fund manager, John Paulson.

Paulson, head of the New York investment fund Paulson & Co., topped the list with an estimated $3 billion in personal earnings during 2007.

This unprecedented level of annual pay was reached at a time when Paulson & Co.'s subprime-shorting strategy led outsized returns in several of its funds, most notably the Paulson Credit Opportunities Fund.

Here's an excerpt from FT's article, "Top hedge fund manager earns $3 billion":

"The 10 best-paid hedge fund managers took home more last year than the combined GDP of Afghanistan and Mongolia as those predicting the global financial meltdown made record profits. Between them, the top 10 individuals earned up to $14bn, according to estimates by the magazine Trader Monthly, John Paulson in New York making $3bn, equal to the GDP of Kyrgyzstan or Rwanda...

...Mr Paulson and Phil Falcone, of New York's Harbinger Capital, who was estimated to have made $1.5bn-$2bn, were both hugely successful last year with bets against US subprime mortgage securities."

For more on Paulson's subprime strategy, see, "Trader made billions on subprime" - Wall St. Journal.

Be sure to join us tomorrow when we look at a famous trader of yesteryear, and the long out-of-print book which served as a sort of operations manual for his personal trading methods.

See you then.