Paulson & Co.

Paulson & Co. is the investment firm founded by John Paulson in 1994, now operating as a family office after returning all outside capital in 2020. The firm manages approximately $4 billion in Paulson’s personal wealth. Paulson is best known for generating approximately $15 billion in profits from his bet against the subprime mortgage market during the 2007-2008 financial crisis, widely regarded as the single greatest trade in Wall Street history.

Investment Strategy

Paulson & Co. was originally a merger arbitrage fund, specializing in the complex analysis of corporate mergers, acquisitions, and restructurings. The firm’s expertise in evaluating event-driven situations led Paulson to identify the unsustainable nature of the subprime lending market well before the crisis materialized. His decision to express this view through credit default swaps on subprime mortgage-backed securities produced returns that reshaped his career and the broader hedge fund industry.

Following the financial crisis, Paulson expanded the firm’s strategy set to include macro investing, gold investing, and real estate. His gold thesis, built around concerns about currency debasement and inflation in the wake of unprecedented monetary stimulus, led to substantial positions in gold bullion and gold mining stocks through a dedicated gold fund.

As a family office, Paulson & Co. maintains a diversified portfolio across public equities, gold, real estate, and event-driven situations. The firm continues to apply the same analytical rigor to merger arbitrage and corporate events that defined its early years. Without outside investor constraints, Paulson can hold positions for longer periods and tolerate greater interim volatility than was possible in the hedge fund structure.

Paulson has also been a significant investor in pharmaceutical and healthcare companies, often taking positions around merger activity, regulatory catalysts, and patent cliffs. This sector expertise remains a core competency of the investment team.

Private Markets Approach

Real estate has become one of Paulson’s most significant private markets activities. He has invested heavily in Puerto Rico, attracted by the island’s tax incentives under Act 60 (formerly Acts 20 and 22). Paulson’s Puerto Rico investments include luxury resort development, the acquisition of the St. Regis Bahia Beach Resort, and residential real estate. He relocated his personal residence to Puerto Rico and has been a prominent advocate for the island’s economic development.

Paulson has also made private equity investments in operating businesses, particularly in financial services and healthcare. These investments tend to be event-driven, targeting companies undergoing restructuring, management changes, or regulatory shifts that create asymmetric return profiles.

The firm’s gold investments straddle public and private markets, with positions in publicly traded gold miners and exposure to physical gold. Paulson has maintained his view that gold serves as a hedge against monetary policy risk, and the position remains a meaningful component of the portfolio.

Philanthropically, Paulson has donated over $1 billion, including a $400 million gift to Harvard University’s School of Engineering and Applied Sciences (now named the John A. Paulson School of Engineering and Applied Sciences). The Paulson Family Foundation supports education, healthcare, and conservation initiatives.