The 59-year old financier said the gift was his way of thanking the Ivy League school for providing him and others with a top flight education, to which he credits his success at his $19 billion firm Paulson & Co.
"Today is an opportunity to thank Harvard," he said at a conference on campus announcing the donation to Harvard's School of Engineering and Applied Sciences. Paulson earned a business degree from Harvard in 1980.
Nitin Nohria, the dean of the Harvard Business School, said the donation would place Boston at the center of U.S. innovation and "make those people on the West Coast tremble."
The donation is the third record-sized gift Harvard has received from alumni since last year, and comes two years into the Ivy League school's five-year campaign to raise $6.5 billion in donations. The campaign has already topped $5 billion. The school's $36.4 billion endowment makes it the world's richest university.
In 2014, hedge fund executive Kenneth Griffin, who began trading securities as a Harvard undergraduate in the 1980s, set a record with a $150 million gift. Only a few months later, the Morningside Foundation, led by Hong Kong venture capitalists Ronnie and Gerald Chan topped that with a $350 million donation to the School of Public Health, where Gerald earned his master's and doctorate degrees.
The engineering and applied sciences school, which counts former Microsoft Corp (>> Microsoft Corporation) Chief Executive Officer Steve Ballmer and NASA astronaut Stephanie Wilson among its graduates, will be renamed the Harvard John A. Paulson School of Engineering and Applied Sciences.
"John Paulson's extraordinary gift will enable the growth and ensure the strength of engineering and applied sciences at Harvard for the benefit of generations to come," Harvard President Drew Gilpin Faust said in a statement.
Paulson's best-known bet against an overheated housing market before the financial crisis netted his fund $15 billion and cemented his personal fortune, estimated by Forbes at $11.2 billion.
His flagship Paulson Partners fund has compounded at 13.6 percent a year over the last two decades, handily beating the Standard & Poor's 500 index.
In 2012, Paulson made his first prominent gift with a $100 million donation to Central Park, near his New York City home.
(Editing by Richard Valdmanis. Editing by Andre Grenon)
By Svea Herbst-Bayliss