Hedge funds and other investors stand to make billions of dollars from their holdings in the bankrupt US mall owner General Growth Properties, underscoring the extent of the recent rebound in financial markets, people familiar with the matter say.

Among the biggest potential winners is William Ackman's Pershing Square Capital Management, which is sitting on a paper profit of more than $800m on investments in the debt and equity of GGP, according to people familiar with Mr Ackman's fund. Other investors that are said to stand to make big profits on their holdings include Centerbridge Partners, Elliott Associates, John Paulson's Paulson & Co, and York Capital.

“General Growth is a fantastic example of the speed with which real estate finance is coming back,” says Bob Steers, co-chairman of real estate investment firm Cohen & Steers, which has not invested in General Growth.