The European arm of Paulson & Co., the hedge fund run by manager John Paulson, renowned for his profitable prediction of the sub-prime crisis and subsequent under-performance, has seen its profits collapse.

Profits for Paulson Europe fell to £3.7m for the year ended March 31, 2012, an 86% fall from the same period in 2011, when the fund made a profit of £26.5m, according to accounts filed this week in Companies House.