New Paulson fund seeks dollars in the desert

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, according to two people familiar with the situation. The vehicle is a private-equity fund, rather than a hedge fund. This means Paulson makes capital calls to investors when opportunities arise. It also means investors are locked in for many years. Paulson seeded the fund with some of his own money and brought in Michael Barr, a former real-estate, private-equity specialist at Lehman Brothers Holdings Inc. /quotes/comstock/11i!lehmq (LEHMQ 0.04, 0.00, 0.00%) , to run it. 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.

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