Paulson & Co., Inc. is an investment management company based in Palm Beach, Florida, US. Previously, it was a hedge fund established by John Paulson in 1994. Since 2020, the firm has operated as a family office managing Paulson's personal wealth. Specializing in "global mergers, event arbitrage, and credit strategies", the firm had a relatively low profile on Wall Street until its hugely successful bet against the subprime mortgage market in 2007. At one time the company had offices in London and Dublin.

Paulson & Co. Inc. was established by John Paulson, its founder and president, in 1994.

Paulson has invested in a number of undervalued companies that are acquisition targets, aiming to increase the bid price on these companies as a large shareholder. In 1997, Paulson, which owned a 6.2% stake in Washington National Corp., opposed PennCorp Financial Group Inc.'s $400 million deal to takeover Washington National, calling the terms of the deal "inadequate". This holding out paid off when another suitor, Conseco Inc., purchased Washington National for $410 million.

In 2005, Paulson Co. analyst Paolo Pellegrini convinced John Paulson of the danger of weak credit underwriting standards, excessive leverage among financial institutions and a fundamental mispricing of credit risk particularly in the housing market. Paulson began "shorting" this credit risk by purchasing the hitherto obscure derivative known as credit default swaps to "insure" debt securities (Paulson Co. did not own the securities it was "insuring", but merely believed they would default) they thought would decline in value due to weak credit underwriting. The bubble continued to grow through 2005 and 2006, but by 2007 began to deflate.

In one later widely publicized deal, Goldman Sachs put together a "synthetic" collateralized debt obligation (CDO) called ABACUS 2007-AC1 where investors (such as the European banks IKB Deutsche Industrie, and ABN Amro, and the New York insurance company ACA Financial Guaranty) provided the "long" by taking the risk from subprime mortgage bonds, effectively providing Paulson with insurance in the case of subprime mortgage default. The deal was made in late April 2007 and several months later the bonds began to default and Paulson eventually made about $1 billion total from those investors' losses. In total Paulson reportedly earned $15 billion on $12.5 billion of investment in 2007—a return of over 100%.

In 2008, Paulson's bearish outlook on the credit markets continued. Paulson believed that credit problems would expand beyond subprime mortgages into consumer, auto, commercial and corporate credit, stressing financial institutions and causing some to fail. This led them to take short positions in several large financial institutions in the US and the UK that had high degrees of leverage, high concentrations of assets in deteriorating sectors and rising credit costs. Sectors include mortgage finance companies, specialty finance companies and regional, national, and global banks.^{[citation needed]}

In September 2008, Paulson bet against four of the five biggest British banks including a £350m bet against Barclays; £292m against Royal Bank of Scotland; and £260m against Lloyds TSB. Paulson is reported to have earned a total of £280m after reducing its short position in RBS in January 2009.

To help protect their bets, PCI and others successfully prevented attempts to limit foreclosures and rework mortgage loans.