The European arm of one of the few remaining successful hedge funds, which has just made almost £400m (€440m) shorting UK banks, increased profits tenfold by making record gains for investors in the 12 months to March 2008, according to the most recent accounts available.

London-based Paulson Europe, a partnership, increased its profit from £3.5m in 2007 to £37.1m in the year ended 31 March 2008, according to its financial statements just published at Companies House.