Hedge fund manager John Paulson, best known for making billions of dollars in betting on the US housing market's decline, is planning a new fund in the hopes of broadening his investor base, particularly in Europe, people familiar with the matter say.

His firm, New York-based Paulson, is launching a fund under the European standard for open-ended investment funds, known as Ucits, that will track existing investments, according to one of the people familiar with the matter. Paulson plans to launch the fund, which will be domiciled onshore in Europe, in the coming months, the person said. It is being launched in conjunction with Germany's Deutsche Bank.