John Paulson, the hedge fund wizard who made an estimated $3.7 billion betting against the housing and financial sectors during the peak of the credit crisis, apparently believes things are turning the other way.

The Paulson Real Estate Recovery Fund that he announced in a year-end letter to his investors is going through the final stages or regulatory approval, The London Independent reports.

And the Telegraph of London reports that documents recently filed with the Securities and Exchange Commission means Paulson can soon begin taking in investors.

The fund’s exact size hasn’t yet been determined but is expected to total about $200 million, according to the Telegraph. Paulson & Co. currently manages almost $29 billion.

The fund will be set up with a private equity format, rather than as a hedge fund, locking investors in for years. It will invest in distressed real estate assets.

"Given the continued downward pressure on the housing process and lack of capital in the real estate sector, there will be numerous investment opportunities going forward," Paulson wrote in the letter.

Paulson hired two ex-Lehman Brothers real estate private equity executives to run the new fund, Mike Barr and Jonathan Shumaker.

Others are more circumspect about housing, including the Yale economist who long called the collapse.

“The conspicuous fact with our [Case-Shiller] data is that prices are still falling, although at a somewhat lower rate,” Robert Shiller told Time magazine.