Star US hedge manager John Paulson, famous for making a huge fortune during the 2008 financial crisis, has said he will decide ‘in the next year or two’ whether to turn his hedge fund into a family office.
Speaking to the podcast According To Sources, produced by Broome Street Capital founder Michael Samuels, Paulson (pictured) said he was begining to think about his exit plans from his business Paulson & Co.
The firm reportedly manages around $9 billion (£7 billion) in assets – down from a 2011 peak of $36 billion.
The 63-year-old investor said: ‘Most people – eventually – when they get to this level do make a decision.
‘Either they want to get bigger and create a bigger business of managing money, or they want to make their life easier and gradually morph into a family office.’
Noting that fellow hedge fund heavyweight George Soros – who also made billions in the banking crisis – decided to turn Soros Fund Management into a family office once he owned 90% of the funds he managed, Paulson said he faced a similar choice now his personal capital makes up around 75-80% of his firm’s funds.
‘I’ll have to make that decision in the next year or two – whether we want to continue to manage outside capital, or if I just turn into a family office,’ he said.
He added that other options might be to split the company into two office by spinning off the funds with outside capital and converting the rest into a family office, or reaching a profit sharing arrangement with his partners if they want to continue the hedge fund business.