When John Paulson founded his eponymous hedge fund company in 1994, his focus was merger arbitrage. Now, with a two-decade track record and one massive win in his credit strategy, he's again finding luck with his original investing style—and with telecommunications in particular.
So far this year, Paulson has won big on the mobile carrier SoftBank Corp.'s $21.6 billion controlling investment in Sprint Nextel, a deal in which he lobbied successfully for a higher price and a bigger cash component. He's improved his returns from MetroPCS's sale to the T-Mobile unit of Deutsche Telekom by demanding better terms and less debt. And in the wake of news late Friday that AT&T planned to take over Leap Wireless in a $1.2 billion cash deal—valuing the prepaid wireless provider at 88 percent above its share price at that time—Paulson appears primed to make even more from his telecom holdings.
Paulson is Leap's third largest shareholder, with 7.8 million shares, according to recent filings, or about 10 percent of the shares outstanding.
It's early yet in the Leap deal and shareholders and government officials must still approve the deal in order for it to be completed. Unsurprisingly, though, Paulson appears set to back it.
(Read More: Delivering Alpha: 2012's Best and Worst Ideas)