Jan. 5 (Bloomberg) -- Paolo Pellegrini, the hedge-fund manager who helped Paulson & Co. make more than $3 billion in 2007 on bets the U.S. housing bubble would burst, resigned to start his own fund, a person familiar with the matter said.

Pellegrini, 52, a manager of Paulson’s credit opportunities funds, left on Dec. 31 in an “amicable” departure, said Armel Leslie, a spokesman for New York-based Paulson & Co. John Paulson, founder of the firm, which oversees $36 billion, couldn’t be reached for comment.

Paulson and Pellegrini became convinced in 2006 that investors were overvaluing mortgage-backed securities whose risk for losses they or credit rating firms had misjudged, according to client letters obtained by Bloomberg News. The firm’s credit opportunities funds soared about sixfold in 2007 as mortgage defaults rose and the value of the securities declined.

Pellegrini’s new fund, New York-based PSQR LLC, will use a strategy known as fundamental macro investing, which trades everything from commodities to currencies and seeks to profit from changes in global economies. He will start with his own money before opening to outside investors later this year, the person familiar with the plans said.

Pellegrini’s departure was reported by the Wall Street Journal earlier today.

Paulson Credit Opportunities and Credit Opportunities II funds gained about 15 percent last year through the middle of December, according to a person familiar with the returns. Hedge funds in 2008 suffered their worst year in two decades, with the HFRX Global Hedge Fund Index falling 23 percent through Dec. 30.

IndyMac Purchase

Paulson & Co. is among a group of investors led by Steven Mnuchin who agree to buy IndyMac Bank from the Federal Deposit Insurance Corp. and inject $1.3 billion in cash. The FDIC, which seized the institution in July after a run by depositors, was forced to open bidding to nonbank investors after failing to find a buyer among IndyMac’s stronger rivals.

Pellegrini, born in Milan, worked for investment bank Lazard Ltd. from 1986 to 1995, according to Paulson & Co. marketing materials. Like Paulson, he has a master’s in business administration degree from Harvard University.

To contact the reporter on this story: Tom Cahill in London at tcahill@bloomberg.net

Last Updated: January 5, 2009 10:01 EST