Paulson, who has invested millions of dollars in buying up several luxury hotels on the cash-strapped island over the past several years, will play cheerleader for investing in the commonwealth by serving as the keynote speaker at the Puerto Rico Investment Summit at the Puerto Rico Convention Center.
“He will be there talking about the value of investing in Puerto Rico,” a source familiar with the conference said. “He’s trying to attract capital to Puerto Rico.”
While the temperature outside the convention hall is expected to rise into the 80s, Paulson might not get as warm a welcome from prospective investors — especially the hedge fund executives who are peeved at the moves proposed by Puerto Rico Gov. Alejandro García Padilla to restructure $70 billion in debt.
The governor’s proposal calls for stiff haircuts on payouts on various bonds.
On some sales-tax-backed bonds, he has proposed paying 54 cents on the dollar. Some of those bondholders on Wednesday countered his proposal by offering a plan that would pay them 100 cents.
In light of the battle over how much bondholders will be paid, trying to sell other investors on pumping more money into the island’s assets is an uphill fight, sources said.
“Why would someone invest in Puerto Rico when they are going to default on federally constituted debt?” one source said.
Paulson does not own any of Puerto Rico’s debt, sources said.
The billionaire is a big believer in investments in Puerto Rico.
In September 2013, Paulson & Co. bought a controlling interest in the exclusive St. Regis Bahia Beach Resort as well as the Bahia Beach Resort & Golf Club.
Paulson is building a home for himself on Bahia Beach, the master-planned community that he now owns — and that’s situated on 483 acres of pristine coconut palms .
In March 2014, Paulson added to his Puerto Rican exposure by spending $260 million to buy two hotels: the Condado Vanderbilt and the La Concha Renaissance Hotel and Tower.
And then this past July, Paulson spent $20 million to buy the San Juan Beach Hotel. In August 2014, he bought the 326,000-square-foot American International Plaza building in the Hato Rey financial district.
His properties would benefit if more hedge funds invested in PR.
Since making his name and a personal $3.7 billion by betting against the housing market, Paulson has struggled in some of his other gambits.
The 60-year-old has made incorrect investments on energy, gold and Europe’s economy. His funds now have roughly $18 billion of assets under management, falling from $40 billion five years ago.
Paulson declined to comment.
By Josh Kosman
John Paulson will encourage investments in Puerto Rico
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