John Paulson, a U.S.-born hedge fund manager, famously made $5 billion in 2007 by shorting the U.S. housing market. He was named “the man who broke the bank of America” because he bet against subprime mortgages and wrote credit default swaps (CDS) to insure against them.

Paulson began his career studying at Harvard Business School but dropped out to start his own company to manage risk for large institutional investors such as universities and pension funds in 1985 for $3 million from a group of 20 clients. In 1990, he started investing on behalf of Bear Stearns Asset Management Inc.

Paulson is known for selling his CDSs against subprime mortgages, which he says he did in an “elegant” fashion. Paulson said he could achieve this by buying a contract that offered protection against a decline in an index of subprime mortgages to about $525,000 and selling it for about $700,000. Such contracts are complex derivatives traded on over-the-counter markets and allow the seller to get cash from the buyer if the index falls below a specific value.

In 2006, Paulson set up his hedge fund firm, Paulson & Co., with some of his former Bear Stearns colleagues. The following year, his fund earned $15 billion, including $5 billion in the fall of 2007, shorting the housing market. He was awarded against the United States Treasury in 2010 to pay back only a fraction after a court ruled that he used one of his funds to offset losses from another fund.

Paulson has now set up a credit quantitative hedge fund firm called Paulson & Co., headed by Andrew Feldstein and Daniel Nadler, that manages more than $12 billion and is based in New York City. It is focused on investing in credit spread products, including interest rate swaps and bonds with built-in compensation for default risk.

Paulson is known for his philanthropic work. He is an avid art collector and has founded the Goldman Sachs Foundation. The foundation’s goal is to sponsor various activities at the Metropolitan Museum of Art, including opening new exhibits, funding art acquisitions for the museum, and creating educational opportunities for young people.