Hedge fund that anticipated the housing collapse sees $3bn Recovery Fund, set up to benefit from strong economic bounceback, lose 9% of its value Misplaced optimism by US hedge fund manager John Paulson about the ability of the US to bounce back from recession is costing his wealthy investors dearly, it emerged today. Amid fears on Wall Street about the faltering recovery in the world’s biggest economy, Paulson & Co saw its funds suffer heavy losses last month. Reuters reported that Paulson & Co’s flagship Advantage Plus fund lost more than 4% of its value in August