John D. Arnold runs Centaurus Energy LP, a Houston, Texas based hedge fund that specializes in trading energy products. After graduating from Vanderbilt University he began his career as a trader at Enron. After initially working on the Crude Oil desk, John moved over to the Natural Gas Desk upon the departure of Jeff Bussan. Using their new Internet-based trading network, EnronOnline he is credited with making three quarters of a billion dollars for Enron in 2001 and was rewarded with an $8 million bonus. [1]. According to Arnold, “After Enron collapsed, there was a general revaluation of credit risk among energy companies. The better credits were less willing to take on the lesser credits as counterparties. So the lesser credits found themselves with fewer counterparties willing to trade with them, even though they still needed to hedge the pricing risks in their business. Hedge funds previously had not been involved in the over-the-counter market, except for the very largest, because the other participants were reluctant to grant credit to that type of entity.” When Enron collapsed in 2002, he founded Centaurus with his previous years $8 million bonus, and now has as much as $3 Billion in assets under management [2] . His employees include several big name energy traders including ex-Enron CEO Greg Whalley [3], Bill Perkins, Jeffrey Welch and Conrad Goerl previously of Motherrock. During the collapse of Amaranth Advisors, Centaurus is widely credited as being one of the major players on the other side of their position, and returning as much as 150% in 2005. It is rumored that Mr. Arnold made $1.5 billion to $2.0 billion personally from the trades he placed. [4], [5] In Forbes magazine's list of 400 richest Americans 2007 John Arnold posted a net worth of $1.5 billion and ranking 317th in Forbes magazine's list. At 33, he also holds the distinction of being the youngest billionaire on the 25th installment of the Forbes 400.
Notes
- ^ New York Times, Energy Trading, Post-Enron, January 15th 2006
- ^ WSJ Online, Trading on the Enron Mystique
- ^ New York Times, Energy Trading, Post-Enron, January 15th 2006,
- ^ FT.com, Spectacular profit from gas futures, January 4th 2007.
- ^ FT.com, Smart trades that made this a good year for some, December 20th 2006
