Paulson hedge fund invests $2.2bn in Bank of America

Hedge-fund guru John Paulson, who pocketed about £280m in shorting RBS during the financial crisis, has taken out a $2.2bn long position in Bank of America.

Paulson, personally estimated to have collected well in excess of $2bn in betting against the US housing market, has become the fourth-largest owner in BoA, boosting hopes in further financial system recovery.

The Paulson & Co fund bought 168m shares in BoA during the second quarter, worth about $2.22bn at the end of June.

In September last year, the FSA's short-selling ban forced Paulson to disclose large short positions in RBS, Lloyds TSB, Barclays and HBOS.

It is estimated the combined positions were worth in excess of £900m.