UPDATE 1-Losses mean sleepless nights for John Paulson

Thu Oct 20, 2011 3:09pm EDT

* Paulson appears at industry conference

* Avoids protesters by leaving through side door

NEW YORK Oct 20 (Reuters) - Hedge fund heavyweight John Paulson said poor performance by his funds keeps him up at night, so the billionaire stock picker must be going sleepless a lot these days.

This year is quickly shaping up to be the worst of Paulson's decades-long career, with most of his portfolios in the red and the Advantage Plus fund off 47 percent through September.

Paulson, who shot to fame and fortune with a bet in 2007 that the housing market would crash, has been engaging in as much damage control as possible before a critical Oct. 31 redemption deadline. Last week he held a call with investors, and on Thursday he spoke at a conference sponsored by the industry trade group Managed Funds Association.

As Paulson and two other prominent fund managers, Eric Mindich and Paul Singer, addressed an audience at the Pierre Hotel in midtown Manhattan, a handful of anti-Wall Street protesters gathered outside on Fifth Avenue chanting slogans aimed at the executives.

The panel discussion -- titled Challenges, Opportunities and What Keeps You Up at Night -- was off limits to the media and attendees were asked not to speak to reporters. But several chatted all the same, saying that when Paulson was asked the critical question, he replied that losing money and poor performance robs him of sleep.

"He was being very honest and earnest, not at all flip about this matter," said one attendee, who did not want to be identified.

Many of Paulson's funds have lost big this year as the money manager bet that the U.S. economy would revive sooner rather than later.

Outside the hotel, the protesters handed out fliers with Paulson's and Singer's pictures and chanted "Hey, Paulson, you can't hide, we can see your greedy side. Paul Singer, you can't hide, we can see your greedy side."

Paulson earned $5 billion last year, an industry record, on a successful bet on gold. He earned about $3 billion in 2007.

Since the protests against Wall Street started, Paulson's eye-popping paydays have made him a target.

But on Thursday, he slipped out of the Pierre Hotel nearly unnoticed, dashing out a side door into a waiting black vehicle that whisked him away.

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