A new hedge fund which will loan money to banks hit hard by the credit crunch is to be launched by John Paulson.
Global financial firms have written off over $300 billion in assets since the onset of the financial crisis last summer, and the money manager hopes to gain from their need to restore their balance sheets.
Paulson himself made $3.7 billion last year due to having effectively predicted the slowdown through making bets against the US housing market – making him the highest single hedge fund earner for 2007.
Plans for the fund remain incomplete, two anonymous sources told Bloomberg.
“Paulson has significant knowledge of the subprime market that has created earthquakes for the banks,” says Ron Geffner, lawyer and hedge funds expert. “I expect that he understands their experiences, balance sheets and financial exposure better than many.”
No specific target figure has been set for the new hedge fund, which launches in December.