Apparently there’s no market that John Paulson can’t handle, as he continues to benefit by betting on the credit crisis. Arguably the highest-earning hedge fund manager of 2007, Paulson has already cleared $1 billion in profits this year.
Bloomberg: Paulson & Co. funds generated profits of more than $3 billion for the firm in 2007, mostly by betting the housing bubble, swollen with subprime mortgages, would burst.
As that year ended, he set his analysts poring over the balance sheets of overstretched financial institutions, including many in the U.K. “We focused on those banks with lots of mortgages,” Paulson says. “After those companies fell, we expanded our focus not just to mortgage assets, but to all credit classes.”
So, the silver lining to the financial meltdown: it’s made John Paulson richer. Well, maybe that’s just a silver lining for him…
The payoff: Four of Paulson’s funds were among the 20 best- performing, and the 20 most profitable, hedge funds for the first nine months of 2008, according to data compiled by Bloomberg, other hedge fund research firms and investors.
The Paulson funds’ gains ranged from 15 per cent to nearly 25 per cent. Based on those returns, they were on track on Sept. 30 to furnish Paulson & Co. with $1.05 billion in profits.