As Paulson and Co employees, clients, and people named John Paulson do not need to be told, the past year and half has not been the most joyous of times for the hedge fund giant. After making billions shorting subprime mortgages, the firm ended 2011 down 55 percent, was down 16 percent through the first half of 2012, and as of July saw assets under management decline 44.9 percent to $21 billion from $38.1 billion, due to a combination of unfortunate performance and redemptions by investors so angry at the fund that they’ve felt the need to repeatedly tell anyone who will listen that parting ways with P&C was among the best if not the best decision they’ve ever made. One investor that hasn’t had to consider voicing its unhappiness to the press or even worry about losing money at all? The 92nd Street Y. Last November Paulson guaranteed that he would personally cover their losses, whatever they turned out to be, come year-end. And the generosity did not stop there: for this one investor only, Paulson offered his services pro-bono, waiving all fees. So while he probably didn’t expect representatives of the Y to rent a skywriting plane to proclaim their love and appreciation for him over midtown, lobby the city of New York to get 92nd renamed Paulson Street, or have his face tattooed to their chests, he probably also figured they wouldn’t turn around and hit him the mother of all slaps in the face.

In this case the declaration that despite the highly favorable terms of their arrangement, any involvement with P&C still felt a tad too risky for everyone’s comfort level.

In the midst of the financial crisis, the 92nd Street Y came up with a sweetheart deal for its endowment: investments in funds run by the likes of John Paulson, Marc Lasry, and other hedge-fund luminaries that were fee-free and guaranteed against losses. The strategy performed well for several years, said people familiar with how it worked, as the Y benefited from risk-free investing in some of the fund industry’s most successful strategies. But, concerned about the impact of a catastrophe in which a money manager couldn’t repay losses and eager to construct a more diversified portfolio, the Y recently opted to redeem its hedge-fund investments, these people said, and rebuild its financial strategy from scratch.

Paulson himself is worth $12.3 billion, so a catastrophe in which he couldn’t repay the Y’s losses would have to be a big one. And don’t give him some line about how you’re pulling out of all hedge fund investments and it’s not personal. You could have let him have this.

Despite Sweet Deal, 92nd Street Y Redeems Paulson Money [CNBC]
Earlier: John Paulson: I’ll Get The Losses This Year, Next Year We Go Dutch?

70 comments (hidden to protect delicate sensibilities)
Show all comments ↓

Comments (70)

  1. Posted by Hobbes | October 26, 2012 at 2:01 PM

    That gift to Central Park must have really put them over the edge.

  2. Posted by guest | October 26, 2012 at 2:07 PM

    Assuming this is their hint to him that they only arrangement they want is guaranteed profits, a la the park.

  3. Posted by The Sword | October 26, 2012 at 1:19 PM

    And so ends another Hedge Fund Douche Bag who thinks he's a genius because he wins one pull of The Wall Street Slot Machine.

  4. Posted by Strong Sell, CFA | October 26, 2012 at 2:19 PM

    It is SO annoying when people want their money back.

    -Alphonse Fletcher

  5. Posted by Guesticular cancer | October 26, 2012 at 2:22 PM

    And so continues an idiotic anonymous internet commenter who thinks things that I'd rather not ponder but does so with a very lacking intellect and less wit than Lance Armstrong's left testicle.

  6. Posted by J.Corzine | October 26, 2012 at 2:34 PM

    so annoying

  7. Posted by Tiny Bubbles | October 26, 2012 at 2:36 PM

    Poor Paulsy, he can't win.

  8. Posted by correction | October 26, 2012 at 2:38 PM

    It is actually 11 bil now per forbes bess. Dropped 4.5 last year. Algebra or matt could tell us how much skin he has in the game.

  9. Posted by guest | October 26, 2012 at 2:39 PM

    It's not U its Y

    - Big Bird, VP of Hedge Fund Investments

  10. Posted by The Pen | October 26, 2012 at 2:39 PM

    I'm still mightier, and I'm telling you to go away.

  11. Posted by corrections II | October 26, 2012 at 2:40 PM
  12. Posted by guest | October 26, 2012 at 2:41 PM

    +1

    - P. Falcone

  13. Posted by 1 Pea 1 Pod | October 26, 2012 at 2:49 PM

    Hey!

    -Lance Armstrong's Left Testicle In A Zip-Loc

  14. Posted by awaiting correction | October 26, 2012 at 2:58 PM

    my data set was from sep.

    another variable for matt

  15. Posted by Guest | October 26, 2012 at 3:21 PM

    HA!

    - Paulson's bank account

  16. Posted by Guest | October 26, 2012 at 3:28 PM

    There's a lot of risk in those "Heads I win, Tails you lose" strategies. We recommend overweighting dice and three-card Monte.

    -UBS Coin Flipping Quant

  17. Posted by guest | October 26, 2012 at 3:35 PM

    I know right.

    ~Bernie Madoff

  18. Posted by Two-Face | October 26, 2012 at 3:35 PM

    Seconded.

  19. Posted by davidrusso | October 26, 2012 at 5:16 PM

    On an unrelated note, Central Park from 91st – 110th street has been converted into shared anarcho-communal living space for OWS holdouts, complete with concert quality drum circle amplification.

    Suck on that 92Y.

    -JP

  20. Posted by guest | October 27, 2012 at 8:26 PM

    不要臉

    -The People's Republic of China

  21. Posted by guest | October 28, 2012 at 4:58 PM

    Actually the Y is changing and repudiating the policys of the previous chairman.

  22. Posted by Ahli Kompi | June 18, 2013 at 5:21 PM

    It is SO annoying when people want their money back.

  23. Posted by HP Baru | June 18, 2013 at 10:17 PM

    Get the latest financial news, headlines, commentary, and analysis when you subscribe to Dealbreaker.

  24. Posted by Obat penyakit asma | June 19, 2013 at 5:22 AM

    Is that true?

  25. Posted by Obat asma herbal | June 19, 2013 at 5:25 AM

    I think it's not annoying when people ask for their right..

  26. Posted by Obat asma tradisi | June 19, 2013 at 5:28 AM

    Need info about finance? just visit here…very recommended

  27. Posted by Obat batu ginjal | June 19, 2013 at 6:16 AM

    Business is business man…

  28. Posted by Obat penyakit tipus | June 19, 2013 at 6:30 AM

    Is that true the best decision they’ve ever made.?? I doubt it

  29. Posted by Obat sakit tipes | June 19, 2013 at 6:32 AM

    Great review and I can open my mind right now

  30. Posted by Obat tipes alami | June 19, 2013 at 6:35 AM

    I think many people will agree with your opinion

  31. Posted by Obat kolesterol | June 19, 2013 at 6:45 AM

    This could be debatable

  32. Posted by Maspermono Online | June 21, 2013 at 8:51 AM

    i get many information from here.

  33. Posted by Puisi persahabatan | June 21, 2013 at 8:51 AM

    nice info guys.

  34. Posted by jual sprei murah | June 23, 2013 at 4:22 AM

    It is SO annoying when people want their money back.
    by
    -Alphonse Fletcher

    are you sure..?

  35. Posted by grosir sprei murah | June 23, 2013 at 4:24 AM

    klise, there are always two side of stories

  36. Posted by jual sprei murah | June 25, 2013 at 9:23 AM

    Informative post content. Your blog post is really gathered valuable information sharing. This business info is really knowledgeable. God bless..!!!

  37. Posted by Heri | June 27, 2013 at 1:39 AM

    Nice information sir ….

  38. Posted by Jual tusuk sate | June 30, 2013 at 2:17 AM

    very inpiration. nice information sir :)

  39. Posted by Agen tusuk sate | June 30, 2013 at 2:20 AM

    I agree with your article. nice share sir

  40. Posted by Click here | July 8, 2013 at 11:06 PM

    I am impressed by the quality of information on this website. There are a lot of good resources here.

  41. Posted by ahli vitalitas | July 9, 2013 at 5:43 AM

    good artikel thanks

  42. Posted by Bahasa Inggris Mudah | July 15, 2013 at 4:05 AM

    Enter text right here!Your knowledge of this subject comes through clearly in this article. I love to read this kind of articles, I hope you will update it. I always wait for your updated posts. it is the reason I often visit hereTips Cara Agar Cepat Hamil

  43. Posted by Bahasa Inggris Mudah | July 15, 2013 at 4:06 AM

    Your knowledge of this subject comes through clearly in this article. I love to read this kind of articles, I hope you will update it. I always wait for your updated posts. it is the reason I often visit hereTips Cara Agar Cepat Hamil

  44. Posted by ldii | July 15, 2013 at 4:45 AM

    I agree with : And so continues an idiotic anonymous internet commenter who thinks things that I'd rather not ponder but does so with a very lacking intellect and less wit than Lance Armstrong's left testicle.

  45. Posted by harga lantai kayu | July 16, 2013 at 1:51 AM

    It is actually 11 bil now per forbes bess. Dropped 4.5 last year. Algebra or matt could tell us how much skin he has in the game.

  46. Posted by Ahli Vitalitas | July 16, 2013 at 10:57 PM

    not gentle disguised with anonymous accounts

  47. Posted by Ilmu Pelet Wanita | July 31, 2013 at 9:48 AM

    who did it, i will find more information about you guys, don't make me kiss you

  48. Posted by jual kaos bola | August 3, 2013 at 6:36 AM

    kick some body ass when he's down? what a man…. kaos bola murah

  49. Posted by Hari - hari indah | August 3, 2013 at 9:26 AM

    Wow, there are many comments… .

  50. Posted by Panduan Komputer | August 5, 2013 at 5:50 AM

    very nice

  51. Posted by TERKINI TERBARU | August 8, 2013 at 8:27 PM

    nice info

  52. Posted by Ahman | October 14, 2013 at 11:01 AM

    Need info about finance? just visit here…very recommended. :)

  53. Posted by MaschuzOnline | October 18, 2013 at 6:58 AM

    Hi, Nice share..
    Hope you visit MY BLOG too
    :)

  54. Posted by Danang | October 30, 2013 at 6:50 PM

    Hi, Nice share..
    Hope you visit http://dananxkusuma.blogspot.com/ too.
    :)

  55. Posted by panduari21 | November 9, 2013 at 12:49 AM

    are you sure about that ?
    visite my blogHarga Ho Oppo

  56. Posted by Umroh Plus Dubai | November 11, 2013 at 1:12 AM

    Thanks for information

  57. Posted by waralaba murah | November 12, 2013 at 3:24 AM

    thanks for share

  58. Posted by Panduari | November 16, 2013 at 9:59 PM

    are you sure about that ?

    Harga Hp Oppo Find Mirror

  59. Posted by penjualan online | November 23, 2013 at 10:56 AM

    ikutan lagi ah, cuma ini bl kebaca gak ya?

  60. Posted by penjualan online | November 23, 2013 at 11:22 AM

    tengok saya dikit, moga bisa saling berbgai ilmu

  61. Posted by kta dbs | November 25, 2013 at 10:34 AM

    thohir investor biggest from indonesia

  62. Posted by wiraswasta rumahan | December 2, 2013 at 11:03 AM

    who's paul ?

  63. Posted by kredit tanpa agunan | December 2, 2013 at 11:03 AM

    thanks a post

  64. Posted by visual basic | December 2, 2013 at 11:05 AM

    good article, thanks

  65. Posted by Harga Android | December 11, 2013 at 8:28 AM

    I'm going to read this. I'll be sure to come back. thanks for sharing. and also This article gives the light in which we can observe the reality. this is very nice one and gives indepth information. thanks for this nice article sukses brooohhh oke?
    Harga Android | Harga Samsung Galaxy | Harga Hp Smartfren | Harga Hp Cross

  66. Posted by ilmupelet jarak jauh | December 22, 2013 at 8:34 PM

    its so wear, billion $

  67. Posted by Panduari | December 28, 2013 at 5:16 AM

    As Paulson and Co employees, clients, and people named John Paulson do not need to be told, the past year and half has not been the most joyous of times for the hedge fund giant.

    harga hp evercross A66 | harga hp terbaru

  68. Posted by perawatan rambut | January 2, 2014 at 10:55 AM

    thanks your content is (y)

  69. Posted by informasi mobil | January 2, 2014 at 11:42 AM

    good your content very awesome :)

  70. Posted by obat herbal | February 23, 2014 at 2:13 PM

    woww thank you for the information, articles of interest