John Paulson, who became a billionaire by betting against U.S. mortgage markets, lost 11 percent this year in his New York-based firm’s biggest hedge fund, according to a person briefed on the returns.
The company’s Advantage Plus Fund, which uses investment strategies designed to profit from corporate events such as mergers or bankruptcies, fell 4.3 percent in August, said the person, who asked not to be named because the fund is private.
Paulson & Co., which oversees $31 billion, had bet on a recovery by 2012 before paring its bullish investments in securities, according to a person cited by Bloomberg last month. The U.S. economy grew less than previously forecast in the second quarter, the Commerce Department said last month, and the Standard & Poor’s 500 Index fell 4.7 percent for the biggest August slump in nine years.
Paulson’s August returns were reported by the Financial Times earlier today.
Paulson’s Advantage fund dropped 2.8 percent last month and 7.5 percent this year, the person said. Paulson’s Gold Fund climbed 9 percent in August and about 15 percent for the year, while his Recovery Fund lost 9 percent that month and is little changed for the year, the person said.
Paulson’s funds that have a share class denominated in gold ranged from a loss of 4 percent to a gain of 3 percent last month, the person said. Their returns have ranged between 1 percent and 14 percent for the year, the person said.
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