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Categorized | Financial

Two partners exit Paulson & Co’s London office


Posted on November 23, 2016

Two partners at Paulson & Co’s London office have left this month as the shrinking New York-based hedge fund continues to downsize.

Assets under management at the merger arbitrage fund, run by billionaire John Paulson, have fallen to $12bn from a peak of about $36bn five years ago and the reduction in headcount is a result of that, according to a person close to the company.

Harry St. John Cooper, a partner and executive in the London office, is the most high-profile departure, along with gold strategist and former partner John Reade, who once ran the PFR Gold Fund along with Mr Paulson and Victor Flores. Trader Peter Dunne and Massimo Stabilini also left the hedge fund.

Part of the decline in assets at Paulson & Co is down to redemptions, while the rest is because of performance as its losing bets on healthcare companies including Allergan and Valeant contributed to the drop. It is also a large shareholder in Shire and Teva.

Much of the money that is left at the company is that of Mr Paulson, who has pledged part of his own fortune to keep the funds running. The majority of the London office has now departed, including more junior staff, according to another person with knowledge of the office.

There is a chance that Paulson & Co’s fortunes may now be reversing as healthcare stocks rallied following Donald Trump’s US election victory. Mr Paulson is a significant donor to the Republican party and supported Mr Trump’s candidacy.

Mr Paulson, one of the titans of the US hedge fund industry, made billions betting against subprime mortgages before the financial crisis. Paulson & Co’s Advantage Plus fund returned 158.5 per cent in 2007, 37.6 per cent in 2008, 21.5 per cent in 2009 and 17 per cent in 2010.

Paulson & Co’s London office is still being led by Orkun Kilic, a partner and the company’s head of European Investments, and remains part of the global event-arbitrage strategy.

Paulson & Co said: “Paulson Europe LLP remains part of our global event arbitrage business and the core team is in place to serve our clients.”