John D. Arnold

John D. Arnold runs Centaurus Energy Advisors, LLC, 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. [http://www.nytimes.com/2006/01/15/business/yourmoney/15traders.html?ex=1223701200&en=6b0d2c03cd871b41&ei=5035&partner=MARKETWATCH New York Times] , Energy Trading, Post-Enron, January 15 2006]

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 year's $8 million bonus plus additional funds raised from his short sales of Enron stock just prior to its collapse, and now has as much as $3 billion in assets under management. [ [http://users1.wsj.com/lmda/do/checkLogin?mg=wsj-users1&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB116346968528722257.html%3Fmod%3Dhps_us_at_glance_markets WSJ Online] , Trading on the Enron Mystique] His employees include several big name energy traders including ex-Enron CEO Greg Whalley, 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. [ [http://www.ft.com/cms/s/69b7daf0-9c26-11db-9c9b-0000779e2340,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F69b7daf0-9c26-11db-9c9b-0000779e2340.html&_i_referer=http%3A%2F%2Fwww.google.com%2Fsearch%3Fsourceid%3Dnavclient FT.com] , Spectacular profit from gas futures, January 4 2007] [ [http://www.ft.com/cms/s/753ba1c4-904e-11db-a4b9-0000779e2340.html FT.com] , Smart trades that made this a good year for some, December 20 2006]

In "Forbes" magazine's 2008 list of 400 richest Americans, John Arnold ranked 163rd, with a net worth of $2.5 billion.

References