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John Paulson’s Hedge Fund Scales Back Operations

A London partner and portfolio manager has left Paulson & Co.

Hedge fund manager John Paulson is reportedly pulling his firm out of London.

Orkun Kilic, a partner and portfolio manager for the Paulson European Opportunities Fund, has left the firm, according to a June 18 filing with the U.K. government.

Kilic was the firm’s last remaining London partner, according to the Financial Times, which first reported the news on Thursday. The FT report said that Paulson & Co. has been downsizing its London operations since 2016, when then-partner and executive Harry St. John Cooper left alongside former partner John Reade and two traders.

A spokesperson for Paulson & Co. said in a statement that the European fund “represented a small amount of our AUM,” noting that “the U.K. and Western Europe will continue to be an important part of our investment focus.”

Paulson & Co., which skyrocketed to fame after Paulson’s lucrative pre-crisis bet against the subprime mortgage market, has struggled in recent years, with assets under management falling sharply below the firm’s peak of $36 billion. Last year, the firm laid off some of its senior-level traders and partners in what a spokesperson described as a “rightsizing.”

[II Deep Dive: Paulson’s Hedge Fund Lays Off Staff]

As of January, Paulson’s own money made up roughly 75 to 80 percent of the hedge fund firm’s assets under management, according to comments Paulson made on a podcast interview with Broome Street Capital founder Michael Samuels.

During that same interview, Paulson noted that he would consider converting his firm into a family office within the next two years, or possibly split off the remaining outside capital for his partners to continue managing while he converts his own investments into a family office.

Bloomberg reported in April that Paulson & Co. has already created a “side-by-side” management arrangement which could allow for ultimately spinning off the outside capital. Under the restructuring, the bulk of Paulson’s personal capital is segregated from that of outside investors in a separate set of funds.

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