By Svea Herbst-Bayliss
BOSTON (Reuters) - Billionaire investor John Paulson, who credits his success on Wall Street to a top education, is donating $8.5 million to New York City's largest network of charter schools.
The gift to Success Academy marks the 59-year old hedge fund manager's second multi-million dollar pledge to a school in two months, following a record $400 million donation to Harvard University in early June.
Success Academy teaches roughly 11,000 children in 32 schools in some of the city's poorest neighborhoods. Some of the money will be used in part to open two new middle schools next month, raising the total of schools run by the network to 34, Success Academy spokeswoman Ann Powell said.
"I'd be so excited if a student from Success Academy one day went to Harvard," said Paulson, who runs $19 billion Paulson & Co. and earned a business degree from Harvard.
"Education is the ticket out of poverty and Success Academy has a proven formula for achieving that. My goal, in making this donation, is to help as much as I can," Paulson said in a telephone interview.
Charter schools - public schools that are privately run - have long been a favorite cause with wealthy hedge fund managers, including Daniel Loeb, David Einhorn and Whitney Tilson. Loeb is chairman of the board of Success Academy.
Paulson said he reviewed Success Academy like any other investment and was impressed by the math and reading proficiency of its students.
Paulson also said New York City's public school system is in a crisis and warned that more needs to be done to tackle a growing inequality gap. "The path to reducing or eliminating inequality is through education and I believe in the transformational power of education," he said.
Demand for spots at Success Academy schools is fierce, with 22,000 students entering a lottery to win 2,300 spots this year, putting the acceptance rate close to that of elite Ivy-League schools.
Paulson, whose net worth is estimated at $11.2 billion by Forbes, said he may consider additional donations to the school network and hopes his gift opens the door to others.
(Reporting by Svea Herbst-Bayliss; Editing by Richard Valdmanis and Dan Grebler)