John D. Arnold

John D. Arnold
Born	John Douglas Arnold 1974 (age 49–50) Dallas, Texas
Alma mater	Vanderbilt University
Occupation	Investor, former hedge fund manager
Net worth	$2.8 billion (March 2013)
Spouse(s)	Laura Muñoz
Children	3

John Douglas Arnold (born 1974) is an American billionaire and former hedge fund manager who specializes in natural gas trading. His firm, Centaurus Advisors, LLC, was a Houston-based hedge fund that specialized in trading energy products. Arnold announced his retirement from running the hedge fund on May 2, 2012.

Early life

Arnold was raised in an upper-class family in Dallas, Texas, and he was the younger of two sons. Like Arnold, his brother, Matthew, also traded at Enron. His father was a lawyer, and his mother worked as an accountant at Arnold's Centaurus. The father died when Arnold was 17. In 1995, he graduated from Vanderbilt University with a degree in mathematics and economics. He is a member of Lambda Chi Alpha.

Career

Enron

After college, he began his career at Enron as an oil analyst but was soon promoted to assistant trader. In 1996, he moved over to the Natural Gas Desk upon the departure of Jeff Bussan and started trading natural gas derivatives. 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. One of his former colleagues dubbed him "king of natural gas."

Centaurus

When Enron collapsed in 2002, he founded Centaurus with his previous year's bonus. 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 counter parties. So the lesser credits found themselves with fewer counter parties 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."

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.

At an energy conference, Arnold stated that he looks "to place bets on a market that he determines is 'biased'... we ask ourselves can we identify what is forcing a market to price a product at an unfair value, and then, what will push it back to fair value." Arnold also referred to the speculative trading that was taking place on the unregulated over-the-counter Intercontinental Exchange (ICE) and NYMEX's Clearport Trading: "Trading never went away... what has changed is the non-commercial type of interest... because of this there has never been as much investor interest as there is today."

During August 2008, Centaurus acquired around 10% of the shares of National Coal Corporation (NCOC).

Arnold gave a public speech to the U.S. Commodity Futures Trading Commission (CFTC), in which he opposed limits on financially settled trading positions but supported limits in the physical energy futures as they near expiration. Arnold said, "I try to buy things whenever they're trading below what [our] analysis shows to be fair value and sell things whenever our analysis shows that the forward curve is higher than our analysis of fair value."

Philanthropy

"In 2010, the Arnolds signed the Giving Pledge, a commitment taken by the world's wealthiest individuals and families to give away half of their wealth to philanthropy or charitable causes." In 2011, Arnold donated over $100 million to different causes including the Laura and John Arnold Foundation which they founded. In 2012, they gave away or pledged $423 million.

The Laura and John Arnold Foundation states that it focuses on three main areas: criminal justice, education, and public accountability. On June 26, 2012, the Foundation launched the ERIN Project, a powerful tool to help analyze the national K-12 education landscape and on August 15, 2012, the Foundation launched the Giving Library to offer philanthropists an innovative way to enhance their strategic giving. On July 1, 2013, the New Jersey Attorney General, Anne Milgram, and the foundation launched a data driven risk management electronic system to assist employees of the Criminal Justice department in their decision making.

The foundation funds the Nutrition Science Initiative in San Diego, where Dr. Peter Attia and Gary Taubes are trying to find the cause of obesity. The foundation backs the Action Now Initiative (ANI) which in turn funds The Nutrition Coalition (TNC) which backed Nina Teicholz when she wrote an investigative piece for The BMJ.

During the United States federal government shutdown of 2013, the foundation announced that it would be donating $10 million in emergency funds to the Head Start program so that some 7,000 kids from low-income families could continue to receive educational services. The programs were at risk because their Federal grants were up for renewal after October 1. The federal government reinstated Head Start funding in a deal approved by Congress on January 13, 2014.

Arnold has funded various politically-oriented 501(c)4 organizations, including Engage Rhode Island. Many of these organizations advocate pension fund reform, encourage state and local governments to reduce benefits to workers and to invest assets in riskier investments such as hedge funds. Some have criticized his efforts, saying that hedge fund managers, such as himself, collect generous sums in fees for managing the funds, while the workers are left with reduced pensions.

Personal life

Arnold is married to Laura Elena (Muñoz) Arnold. Laura Arnold is co-chair of the Laura and John Arnold Foundation, and was formerly an attorney in Houston, Texas and an oil company executive. She is a graduate of Harvard College, Yale Law School and has a Master of Philosophy degree in European Studies from the University of Cambridge. They have three children.

External links

• Centaurus Energy Website