"John Paulson, the hedge fund manager who reaped billions from the infamous ‘Big Short” against the subprime housing market and the American financial system, is now increasing his bet on their recovery, according to recent filings."
Today's WSJ reports on its front page today
"Hedge-fund manager John Paulson personally netted more than $5 billion in profits in 2010—likely the largest one-year haul in investing history, trumping the nearly $4 billion he made with his "short" bets against subprime mortgages in 2007."
"John Paulson, head of hedge-fund giant Paulson & Co., turned bullish on the U.S. housing market in early 2010. Now he’s got a fund that’s betting on a rebound. One of the firm’s latest projects has taken it into the Sonoran Desert in the American Southwest, in search of empty residential-development lots. In November, the firm finished raising capital for the Paulson Real Estate Recovery Fund, gathering roughly $315 million in commitments from investors.
One of the fund’s main strategies is to buy undeveloped tracts of land that already have environmental and building permits. Roads, sewers and electricity may also be in place, but not homes, according to one of the people familiar with the fund. If the real-estate market recovers enough for developers to start building more new houses, this may be the type of land they buy first. That’s because a lot of the costly, time-consuming preparation work already has been done, the person explained."
HT: Mike LaFaive