There is no small amount of irony in this:
"John Paulson, the money manager whose wagers against the U.S. housing market helped him earn an estimated $3.7 billion last year, is now seeking to profit from Wall Street’s search for capital to offset mortgage writedowns.
Paulson plans to open a hedge fund by December that will invest as the world’s biggest banks and brokers add to the $345 billion they’ve raised in the past year, according to two people with knowledge of the matter. His Paulson & Co., which oversees $33 billion, hasn’t set a size target for the fund, said the people, who declined to be identified because the plans aren’t final.
The New York-based firm’s credit funds rose as much as sixfold last year, helped by bets that rising defaults on subprime home loans would pummel the value of mortgage-backed securities. The meltdown has forced the world’s biggest banks and securities firms to take $467 billion in asset write-offs and credit losses and led to the collapse of Bear Stearns Cos.
"Investors who are able to make money in a declining market and then rapidly turn around and profit from a rising market is highly unusual,” said Thomas Whelan, president of Greenwich, Connecticut-based Greenwich Alternative Investments, which advises clients on investing in hedge funds. Paulson declined to comment. His 2007 earnings made him the highest-paid hedge-fund manager, according to Institutional Investor’s Alpha magazine."
Note that Paulson was early in shorting Mortgage back securities, but had the conviction and the patience to wait out the eventual sell off. I would expect something similar here . . .
Those Damn Short Sellers Are Just Killing It!
Paulson & Co. Plans Fund to Provide Capital to Banks
Bloomberg, July 23 2008