John Paulson: I’ll Get The Losses This Year, Next Year We Go Dutch?

When one is an investor in a hedge fund, letters from the top that include lines about being “disappointed,” “clearly wrong in our judgment,” and this year being notable for being “the worst in the firm’s history” are tough to take. Sure, they’re slightly more palatable than those that attempt to explain why the last month/quarter/year went ass-bleedingly bad by deflecting the blame with something like, “We lost it all but you can take solace in knowing it’s not us, it’s the market. The global financial markets are wrong, and we happy few at [insert firm here] are correct, in a way that has yet to reveal itself but rest assured, is coming” and/or offer a silver-lining à la,“Now hear the great news: we’ve turned every dollar you invested in the beginning of the year into 15 cents,” but whether you get a “sorry” or “sorry, we’re not sorry” letter doesn’t really much matter. In both cases, a whole bunch of your money is gone. Generally speaking. If you’re speaking of hedge fund Paulson and Co, however, such is not the case! According to the Times, the fact that the firm has suffered its worst performance since inception is actually of little matter to investors, as John Paulson has “guaranteed” he will be covering their losses, whatever they may be, come year-end. For the purposes of not getting anyone’s hopes up, it should be noted that the guarantee only applies to one investor. Everyone else, past performance yadda yadda still applies to you- better luck next year.

Mr. Paulson, a member of the 92nd Street Y’s board, has guaranteed he will cover the Y for any losses it incurs in his funds. Barring a sharp recovery, Mr. Paulson will have to write a personal check to the organization for several million dollars. “This is a very uncommon arrangement,” said Andrew M. Grumet, a lawyer specializing in philanthropy. “But the 92nd Street Y isn’t your average nonprofit, and John Paulson isn’t your average money manager.”

One of New York’s premier cultural institutions, the 92nd Street Y also houses an exclusive preschool and nursery school, which Mr. Paulson’s daughters attended. Tuition runs as high as $27,150 a year. The Y, on the Upper East Side of Manhattan, is headed by a board that includes some of best-known names in business: Bronfman, Lauder, Tisch…As a result of such losses, he could owe the 92nd Street Y as much as $4 million, according to two people with knowledge of the agreement who requested anonymity because they were not authorized to discuss it. Yet given Mr. Paulson’s wealth — Forbes magazine estimates his fortune at $15.4 billion — a $4 million check would be pocket change for the 55-year-old native of Queens…Mr. Paulson is the 92nd Street Y’s largest outside manager, running about $10 million of the school’s $37.9 million in investments, the two people said. “We’re certainly not ashamed of any of this,” said Sol Adler, the executive director of the 92nd Street Y. “This institution has particularly generous board members, including John and a number of others.”

For those clients disappointed that the generosity does not extend to them, again, please refer yourselves to the fine print. You knew the risks going into this thing. Moving forward, though, perhaps consider any additional money being invested under the “Helping High-Water Marks Happen Foundation”? Might help your cause.

For 92nd St. Y, a Break From Wall St. Worry [Dealbook]

(hidden for your protection)
Show all comments

74 Responses to “John Paulson: I’ll Get The Losses This Year, Next Year We Go Dutch?”

  1. Alt_EST says:

    [Less] Money for People

  2. Guest says:

    Whats $4 mill to someone worth $4bil?

  3. PermaGuestII says:

    Y-M-C-A… it's fun to pay for the Y-M-C-A…

  4. Jerry says:

    It has a kind of understated stupidity.

  5. The Truth says:

    Pfft, they only have 26% of their funds with one manager. Weak.

    – W. Noel

  6. Meistro says:

    He's worth $15B. Too bad investors can't claw back the 20% fees they paid over the last few years.

  7. guest says:

    Can I get in on this?

    -Harbinger capital hostage

  8. guest says:

    the "Helping High-Water Marks Happen Foundation"

    I laughed.

  9. Guest says:

    "…Aaaand it's Gone!"

    Guy who thought it appropriate to channel South Park clip-

  10. What about his legitimate years? says:

    Probably less than 4 bill now, unless he displayed an uncanny ability at self criticism and pulled his own money at of his funds as soon as all the dumb money started stomping in.

  11. Non-profit Investor says:

    I wonder if Paulson will give me the same deal for my HOA. Not to brag, but I have about $10k we could invest if the terms are right.

  12. lol wut says:

    Your money is gauranteed. You can retreive it via Lightsquared shares or via a promissory note to pay in 2 years.

  13. Truffle.Souperino says:

    I feel like someone just gave me a reach around with cactus gloves.

  14. MisterMJ says:

    I very much enjoy dining at the Y.

  15. El Guesto says:

    Well if you cover the Y, you only see the X…

  16. wbsazaezz says:

    x6UcLV woytntzrjafk, [url=]sjppdadczmld[/url], [link=]pcsogxjubikv[/link],

  17. wimhpV Very neat article.Thanks Again. Cool.

  18. I appreciate you sharing this post.Really thank you! Fantastic.

  19. Thanks a lot for the article post.Really thank you! Really Great.

  20. Awesome article post.Thanks Again. Keep writing.

  21. Major thanks for the post.Really looking forward to read more. Great.

  22. I really like and appreciate your blog post. Cool.

  23. Im obliged for the post. Fantastic.

  24. Enjoyed every bit of your blog.Much thanks again. Cool.

  25. Very neat post.Really looking forward to read more. Great.

  26. Im obliged for the blog post.Thanks Again. Will read on…

  27. linser says:

    Say, you got a nice article post. Awesome.

  28. I loved your article.Much thanks again.

  29. the boller says:

    Really informative article post. Much obliged.

  30. Great article.Much thanks again. Want more.

  31. I really liked your blog post. Fantastic.

  32. hplc says:

    Thanks so much for the blog article.Much thanks again. Really Great.

  33. wow, awesome blog article.Really thank you! Great.

  34. cristianos says:

    Enjoyed every bit of your article. Much obliged.

  35. kinesiology says:

    I appreciate you sharing this post. Want more.

  36. porn meme says:

    Im thankful for the article post.Really thank you! Really Great.

  37. Awesome article post.Thanks Again. Great.

  38. Very informative article post.Really thank you!

  39. A big thank you for your article.Thanks Again. Fantastic.

  40. Very informative blog post.Really thank you! Want more.

  41. sex says:

    Muchos Gracias for your blog.Much thanks again. Fantastic.

  42. chris papa says:


  43. fantasy arts says:

    Major thankies for the article.Really thank you! Really Great.

  44. cash says:

    Im obliged for the blog article.Really thank you! Cool.

  45. I really like and appreciate your blog post.Thanks Again. Fantastic.

  46. oakley store says:

    Great blog article.Much thanks again. Want more.

  47. Very informative post. Really Cool.

  48. Hey, thanks for the blog post.Really looking forward to read more. Want more.

  49. Thank you ever so for you article.Thanks Again. Awesome.

  50. magic says:

    Im obliged for the post.Really thank you! Awesome.

  51. domy kielce says:

    I really enjoy the blog article. Keep writing.

  52. proxies says:

    I really liked your article.Thanks Again. Much obliged.

  53. ping says:

    Im obliged for the article. Really Great.

  54. stain says:

    Great, thanks for sharing this article. Want more.

  55. games says:

    Wow, great article.Really thank you! Fantastic.

  56. Im thankful for the post.Really thank you! Fantastic.

  57. mlg sucks says:

    Major thanks for the blog.Really looking forward to read more. Keep writing.

  58. Salute ,

    are you trying to get [url=]instant Cash advance[/url] ??? here on this page you can promptly get one even within bad credit :)
    Whats more you dont need to complete any tedious formality.

  59. Howdy,

    are you trying to get [url=]online cash loan[/url] ?! here on that webpage you can fastly find a loans in minutes .
    Quick payday loans arrange the probable amount to you with the ranging of $100 – $1,500 and the repayment tenure varies from 2 to 4 weeks.

  60. Alva Levitan says:

    The next time I read a blog, I hope that it won’t fail me just as much as this one. I mean, I know it was my choice to read through, nonetheless I truly thought you’d have something helpful to talk about. All I hear is a bunch of crying about something you could possibly fix if you weren’t too busy searching for attention. – jzborogun

  61. Very good article. I am facing some of these issues as well.. –

  62. buy wow gold says:

    I am continuously searching online for tips that can assist me. Thank you!

  63. ftxdxmlvs says:

    LT7p1t okzhwjguljvg, [url=]ttqwdavwirsw[/url], [link=]jqyewmgywdky[/link],