John Paulson, who accurately predicted the collapse of the US housing market, is in the early stages of raising money for a new property fund, through his Paulson & Co investment company, according to The Daily Telegraph. In a departure for the firm, which tends to be more focused on running hedge funds, the new venture will be a private equity fund.

Documents recently filed with the Securities and Exchange Commission will allow Paulson & Co to begin talking to investors about the fund for the first time – with fundraising expected to begin shortly.

Although a cap on the fundraising has not been decided, it is expected that the initial size of the fund will be a couple of hundred million dollars. Mr Paulson has hired Mike Barr, a former managing director in Lehman Brother’s $25 billion real estate private equity practice in New York, to manage the fund.

Mr Barr is being assisted by former colleague Jonathon Shumaker in managing the fund, which will be known as the Paulson Real Estate Recovery Fund. The life of the fund is expected to be seven years, with investments to be made in both the residential and the commercial property sectors.