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There are Calders
everywhere. One Calder canvas anchors the west wall, one the east; a bronze
Calder sculpture guards the windows facing north, high above midtown Manhattan.
The south side could hold a Calder, too, but instead is dedicated to a glory
wall of lucite deal toys and dusty pictures of the host and friends. The
pictures invariably feature men who were, at the time of the photograph, more
famous than the host. That is no longer true.
host does not rush into the room. He saunters purposefully, if that’s possible.
He is slight of stature, indulging in none of the weight that afflicts so many
of his peers. His mien is dark: dark shoes, dark socks, dark suit, dark tie,
dark hair, dark circles—although not as deep as they often seem on camera—under
his dark, but not unfriendly, eyes.
host shakes hands softly and alights upon a white couch under one of his
Calders. He leans back, crossing his left leg over his right. He does not
fidget. He seems neither happy to be here nor particularly annoyed. He takes a
sip of bottled water, poured into a glass.
“So, let’s start,” John Paulson says slowly,
because Paulson—the man who made billions in what arguably is the single most
lucrative bet in financial history—wants to get this over with quickly.
exactly “this” is remains a mystery. Unlike Dan Loeb (of Third Point) or Bill
Ackman (of Pershing Square), Paulson’s hedge fund—the eponymous Paulson &
Co.—does not rely on the media megaphone to move stock prices in its favor. If
there were a spectrum of hedge-fund loudmouth-ness, Loeb, Ackman, and Carl
Icahn would be on one end. Paulson would be on the other. And where Pershing
Square and Third Point are really just legal entities for their founder’s egos,
Paulson & Co. occupies a nebulous middle ground. It’s not an asset
management firm in name alone, but neither is it an enterprise—like Ray Dalio’s
Bridgewater Associates—that seems saddled with a legacy and intent on surviving
So why is John Paulson—quiet billionaire,
legend—now opening his doors to the outside world?
“There are two different questions there,” Paulson
begins, having sipped his water a second time and re-crossed his legs. “One is
about reticence in terms of publicity, and the second is about our strategy for
longevity. Let me deal with the second question. We’re structured as a
partnership. The partnership is the best organizational format for long-term
survivability of a money management firm. The reason is that, if you’re a
partnership, 100% of the reward goes to the partners. My share goes down every
year as the others’ go up, and when I’m ready to retire, the existing
partnership management will already be in place, and they can assume the firm
He does not address the publicity argument—now or
ever. John Paulson, after all, did not become one of the greatest traders of
all time by being an easy read.
Like any piece of art, however, the provenance of John Paulson is important to establish—and,
luckily, that is far easier to decipher than his current motivations.
He was born in the New York suburb Queens, the
third child of an immigrant from Ecuador who fought in the Second World War.
His affection for assets showed itself early, as Gregory Zuckerman revealed in The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson
Defied Wall Street and Made Financial History. According to the author, Paulson’s father took him “to a local
supermarket to show the 6-year-old where to buy a pack of Charms for eight
cents, trying to instill an appreciation of math and numbers in him. John broke
up the pack and sold the candies individually for five cents each, a tactic
that investor Warren Buffett employed in his own youth with packs of chewing
gum.” While not exactly an academic prodigy, Paulson was an eager student of
subjects beyond his grade-level—at least until he entered New York University
At NYU, where he focused his initial efforts in the
arts, Paulson lost his way as well as “his early interest in money,” according
to Zuckerman. A trip to South America and contact with a vibrant uncle changed
that, and he returned to university with a renewed interest in finance. He was
eventually named valedictorian of his class. Harvard Business School
followed—with top honors—as did a move to Wall Street.