John Paulson Doesn’t Want To Run A Mutual Fund, But…

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John Paulson’s strategies are pretty complex, if he may say so himself, as he does. So if he had his druthers, he’d stick with making money (and occasionally losing money) for investors as savvy and sophisticated as he is.

The only problem is, some of those savvy and sophisticated investors are getting a little uppity about little things like $2.3 billion paychecks and 2/20 for sub-S&P500 returns and the like. Well, hear this: If institutional investors don’t want to pay John Paulson, John Paulson will find someone else who does.

The founder of $22 billion hedge-fund firm Paulson & Co., who made his name during the financial crisis earning billions betting against the housing market, is leaving the door open to taking money from less-wealthy investors.

“It’s possible,” Mr. Paulson said Monday night during a discussion at New York University’s Stern School of Business.

Could Paulson Open Up to Mom and Pop? [WSJ MoneyBeat blog]
Paulson, Landy Feel ‘Pressure’ to Reduce Fees [WSJ MoneyBeat blog]

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So Long As John Paulson Doesn't Work Up The Nerve To Send That Redemption Letter To A Certain Hedge Fund Located At 1251 Avenue of the Americas, New York, NY, 10020, Paulson & Co. Will Be Around For Years To Come

Was 2011 a very kind year to John Paulson? No, it was not. Is 2012 shaping up to be any different? Not really, no. His proclamation that last year's losses were but an “aberration” has not exactly been backed by the fact that AP was down 16 percent through June, Morgan Stanley’s prime brokerage put Paulson and Co. on a list of firms it warns clients not to invest with, and a few clients have not only quit the fund but told anybody who will listen that leaving was one of the best decisions they've ever made. Also not great is the fact that assets under management have declined 44.9 percent to $17 billion from $38.1 billion, due to a combination of unfortunate performance and redemptions. Happily, though, there is a silver lining that perhaps few people have thought of, namely that John Paulson's got mucho of his own dinero in the firm and he hasn't given up on the place yet. ...the firm has a saving grace: About 60%, or $12.6 billion of June 30 assets are from employees. Observers said it is impossible to know how much of that employee asset pool belongs to John Paulson, the firm's founder and president, but they speculate it is the vast majority. (By contrast, about 31% or 32% of Paulson & Co.'s assets are from institutional investors.) One source said the hedge fund manager's size at its peak — before the performance decline — combined with the high percentage of employee capital have insulated Paulson from the crippling impacts that performance declines of this size and client redemptions would wreak on other firms. “It's impossible for any other hedge fund firm to lose $17 billion and still be in business,” said the source, who asked for anonymity. “The firm will not fall apart because of this. Just John (Paulson's) money alone is enough to keep the firm in business. But he is not going anywhere. There are absolutely no signs that John Paulson intends to do anything other than manage his way out of this.” This scenario would also have to assume that the firm stops losing money but regardless, suck on the above, New Mexico. Paulson Tries To Bounce Back [P&I via Dealbook]