It was the greatest opportunity of his career, hedge fund manager John Paulson told investors last year. And so Mr Paulson raised a dedicated $1bn fund to profit from problems he predicted in the US subprime home loans market. Just 18 months on, the bet has paid off handsomely for his investors, his firm and, most spectacularly, himself. Mr Paulson's Credit Opportunities I fund leapt 550 per cent from January until the end of October, making it one of only 30 this year to more than double investors' money, according to Chicago-based Hedge Fund Research. "There's never been a trade of this size of profit in the history of financial markets," says Arki Busson, chairman of EIM Group, which has $13bn invested in hedge funds. Three of Mr Paulson's other funds more than doubled their money, giving New York-based Paulson & Co a spectacular set of returns and an appeal to investors that propelled it from a mid-ranking firm to one of the world's biggest hedge fund managers. Investors estimate that across all its funds Paulson & Co has secured profits from subprime of more than $12bn. http://www.ft.com/cms/s/ed8cf74e-a9...ct=archive&and=show&nr=1537&anchor=topic40799
I knew there had to be someone on the other side of the trades that all those German Landesbanks took.