Born to immigrant parents, John Alfred Paulson is one of Wall Street's most revered hedge fund managers and one of the most followed voices. He rose to fame at the height of the 2008 financial crisis, making $4 billion by shorting the housing market. Paulson & Co, a hedge fund he founded in 1994, generated about $15 billion for investors even as turmoil rocked the markets.
The hedge fund manager became widely recognized for identifying overvalued assets and taking positions that would benefit from a decline in value. As part of the strategy, the legendary investor has always emphasized conducting in-depth research to identify promising investment opportunities. The strategy entails going through financial statements and analyzing fundamentals and macro trends. Consequently, investors have always sought billionaire John Paulson's top stock picks.
Paulson's impressive returns at the height of the financial crisis did not come as a surprise, having accrued significant experience and understanding after years on Wall Street. The Finance degree holder from the New York University College of Business and Public Administration acquired an MBA from the Harvard Business School in 1980, which paved the way for him to take up a job at Boston Consulting Group Odyssey Partners and Bear Sterns.
His star in the investment world would align after founding Paulson Co in 1994 with $2 million and one employee. As the financial crisis ended in 2011, the hedge fund had about $38 billion in assets under management, affirming Paulson's success as a hedge fund manager. Nevertheless, by 2018, the hedge fund's holdings had declined significantly to just $9 billion in assets.
The massive sell-off came as the overall hedge fund industry came under immense pressure and lost ground amid severe losses. Paulson Co's reputation had also been tarnished over the decade amid poor returns on hedging returns that could not keep up with the unhedged returns of the market indices. After an illustrious career, Paulson announced at the end of 2020 that this hedge fund would no longer accept outside money. The hedge fund was converted into a family office.
Amid the success in the equity markets, Paulson fell into the category of hedge fund managers embroiled in a fierce divorce standoff. In 2022, the legendary investor made his intention to marry his 34-year-old girlfriend clear after moving her into his Fifth Avenue apartment.
The billionaire investor told friends he wanted to have a baby with the nutrition influencer Alina de Almeida, who was almost half his age. The rumors came to light amid an ugly divorce from Jenny Paulson, having been married for 20 years and sharing two daughters.
The soon-to-be ex-wife rejected a multibillion-dollar settlement from the hedge fund magnate, deciding to take the divorce to court. Nevertheless, Paulson is not the first and won't be the last hedge fund manager embroiled in a fierce divorce settlement.
Billionaire hedge fund manager Israel Englander, who co-founded Millennium Management, was forced to settle for over $1 billion as his wife of more than 40 years left him for a woman. The wife filed for divorce, alleging that the billionaire investor worth over $10 billion had become enraged after she fell in love with a Swiss gallerist.
David Einhorn's performance in the market was never affected as he separated from his wife of 24 years, Cheryl Strauss, in 2017. The Greenlight Capital hedge fund founder has become a successful long/short equity hedge fund manager.
Ken Griffin, the brains behind Citadel Investment Group, another high-profile hedge fund, found himself in a fierce standoff with his ex-wife Anne Dias Griffin after filing for divorce. The ex-wife demanded $1 million in monthly expenses, including $160,000 for hotels and $2,000 for stationery, as part of a divorce settlement in 2015. The divorce battle came after Griffin had built a $24 billion hedge fund empire.
Studies have shown that divorce issues can significantly affect fund managers' performance. Likewise, divorce issues have always been a red flag for savvy investors investing in hedge funds. Hedge fund manager Paul Tudor is one of the high-profile portfolio managers to reiterate that he always withdraws money from a fund when a manager's marriage break up.
Billionaire John Paulson's Messy Divorce and Top Stock Picks
It has also emerged that marriages tend to be more detrimental to older managers who frequently use a trading strategy. Performance among those above the median age of 49 tends to fall 14.3% when hit with marriage issues. On the other hand, young managers are barely affected.
Nevertheless, the likes of Ken Griffin, David Einhorn, and John Paulson have not been affected by marital strife. The duo has continued to perform, depicted by the solid returns of their hedge funds. Bill Ackman, John Burbank, and David Tepper are other high-profile hedge fund managers embroiled in divorce issues and have continued to deliver stellar returns for investors.
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Paulson has joined an exclusive club of hedge fund managers, including Carl Icahn, George Soros, and Stanley Druckenmiller, who have quit managing money for external customers. By releasing himself from the demands of sending quarterly client letters and explaining complex positions to clients, Paulson is now solely focused on managing his money and growing his wealth.
While the billionaire investor has also been embroiled in a fierce divorce settlement, he has not shown any signs of going slow on investing. The legendary investor is active and has diversified his holdings into various sectors, from healthcare to basic metals and financial services. Likewise, he is always looked upon as investors seek insight into market movements and emerging opportunities.
Similarly, we have picked billionaire John Paulson's top stock picks as of the end of the second quarter of 2023. The stocks represent more than 80% of Paulson & Co's portfolio. We have ranked the stocks in ascending order of the hedge fund’s stakes in them. We also got the scoop on what 910 hedge funds in our database had to say about each stock by the end of Q2 2023.
Billionaire John Paulson's Messy Divorce and Top Stock Picks
SSR Mining Inc. (NASDAQ:SSRM) sums up billionaire John Paulson's top stock pick and one of his hedge fund's most significant holdings in the mining sector. The company acquires, develops, and operates precious metal resource properties in Turkey and America. The company has made a name for itself in exploring gold, silver, copper, lead, and zinc deposits.
Over the last ten years, SSR Mining Inc. (NASDAQ:SSRM) has returned 154% to investors, affirming why it is one of billionaire John Paulson's top stock picks. Since the legendary investor acquired stakes in the company in 2019, they have registered a 108% gain. While the stock is down from its all-time highs, Paulson & Co. has still generated significant returns,
For instance, SSR Mining Inc. (NASDAQ:SSRM) has returned $74 million to shareholders through dividends and a share buyback program. Likewise, it is on track to return over $100 million for a third consecutive year. Of the 910 hedge funds in Insider Monkey’s database, 18 reported having stakes in SSR Mining Inc. (NASDAQ:SSRM).
Agnico Eagle Mines Limited (NYSE:AEM) is another company that seeks to strengthen Paulson & Co.'s prospects in the mining sector. The gold mining company explores, develops, and produces precious metals in low-risk jurisdictions. It boasts flagship projects in Canada, Australia, Finland, Mexico, and the US.
It has emerged as billionaire John Paulson's top stock pick even as it increases clout in the gold mining industry through aggressive acquisitions and booking huge profits. While Agnico Eagle Mines Limited (NYSE:AEM) used to operate a single mine in 2008, it has more than 12 operational projects, including the acquisition of Canadian Malartic from Yamana Gold.
Agnico Eagle Mines Limited (NYSE:AEM) is on course to increase its annual production from 3.1 million ounces of gold in 2022 to 3.44 million ounces at the year's end. The mining stock is one of the oldest in Paulson & Co.'s portfolio, with the first investment made in 2011.
According to Insider Monkey’s database of 910 hedge funds, Agnico Eagle Mines Limited (NYSE:AEM) had 42 hedge funds backing it by the end of the June quarter. The lion’s share of Agnico Eagle Mines Limited (NYSE:AEM) was held by First Eagle Investment Management, which had a $313 million stake in the company.
Thryv Holdings, Inc. (NASDAQ:THRY) is a communication services company that offers digital marketing solutions and cloud-based tools to small and medium-sized businesses. The company provides print and digital solutions, including print Yellow Pages search engine market and other digital media solutions.
Thryv Holdings, Inc. (NASDAQ:THRY) emerged as billionaire John Paulson's top stock pick at the height of the pandemic as digital marketing was in high demand. At one point, the stock rallied by more than 300%, generating significant returns for the legendary investor. While the stock has pulled significantly from its 52-week high, the hedge fund still generates substantial returns. The stock currently accounts for 4.8% of Paulson & Co.'s portfolio.
A total of 18 hedge funds tracked by Insider Monkey had reported owning stakes in Thryv Holdings, Inc. (NASDAQ:THRY) as of the end of the second quarter of 2023.
7. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)
Paulson & Co Q2 2023 Investment: $51.43 Million
Percentage of Paulson &Co as of Q2 2023: 5.02%
Number of HedgeFund Holders: 85
Headquartered in Dublin, Ireland, Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is a biotechnology company that discovers, develops, and commercializes medicines for addressing critical needs impacted by autoimmune and severe inflammatory diseases. It is one of billionaire John Paulson's top stock picks in the healthcare sector as it boasts a portfolio of 12 medicines touching on rare diseases, gout, ophthalmology, and inflammation.
Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) has become one of Paulson's best investments since first acquiring stakes in 2019. The share price has exploded from $25 a share to a high of $116. The stock has nearly doubled in value over the past year as it closes in on a $27.8B deal to merge with Amgen.
After the takeover, Paulson & Co. owns stakes worth $51 million, accounting for 5.02% of its portfolio. During Q2 2023, 85 hedge funds out of the 910 that are part of Insider Monkey’s database were Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)’s investors. Matthew Halbower’s Pentwater Capital Management is the largest investor among these since it owns a $1.31 billion stake.
AngloGold Ashanti Limited (NYSE:AU) is a basic materials company that operates as a gold mining company in America, Africa, and Australia. The company's flagship project is Geita project at the Geita project in the Lake Victoria goldfields of Mwanza, Tanzania. It also operates mines in Ghana, Brazil, the US, and Australia.
AngloGold Ashanti Limited (NYSE:AU) has emerged as billionaire John Paulson's top stock pick since 2010. Over the past, the hedge fund has bought and sold shares as one of the ways of gaining exposure and locking in profit. As of the end of the second quarter, the stock accounted for 7.89% of the hedge funds portfolio.
Insider Monkey sifted through 910 hedge funds and found out that 16 of them had stakes in AngloGold Ashanti Limited (NYSE:AU) by the end of the June quarter. Howard Marks’ Oaktree Capital Management was the top gun among the investors, which paid $99.7 million for a piece of the pie.