December 22, 2011 / 7:51 PM / 9 years ago

Paulson funds down again in December: source

NEW YORK (Reuters) - There will be no holiday cheer for hedge fund manager John Paulson this month, as his dismal performance in 2011 is capped off by another miserable performance so far in December.

John Paulson, founder of New York-based hedge fund Paulson & Co., speaks at the Reuters Hedge Funds and Private Equity Summit in New York, September 7, 2005. REUTERS/Chip East

The Paulson & Co.’s Advantage Plus fund, which has been the firm’s worst performer all year, is down another 9 percent through December 16, sending yearly losses to about 52 percent, according to a person familiar with the numbers.

The Paulson Advantage fund, the firm’s largest portfolio, is also hurting again this month, declining about 6 percent. The fund is down about 36 percent year-to-date.

The Standard and Poor’s 500 stock index has been flat so far in December.

A spokesman for Paulson & Co. declined to comment.

For Paulson, one of the $2 trillion dollar hedge fund industry’s biggest stars, 2011 has been a year in which nothing has seemed to work. His funds have suffered badly from big bets on Bank of America (BAC.N), Hewlett Packard (HPQ.N) and Hartford Financial Services (HIG.N) and Sino-Forest TRE.TO.

Those losses were compounded by unfulfilled predictions by the billionaire hedge fund manager that the U.S. economy would experience a recovery this year. Instead, the economy has stagnated, and global markets have whipsawed as the European sovereign debt crisis worsened through the second half of the year.

The average hedge fund was down about 4.37 percent through November, according to Hedge Fund Research’s broadest industry index.

Meanwhile, the gold fund that earned Paulson billions in 2010, is off about 7 percent for the year, according to an investor. The once safe-haven commodity has slumped 18 percent since September, when it hit $1,920 an ounce.

At the end of the third quarter, Paulson was the largest shareholder of the SPDR Gold Trust (GLD.P) exchange-traded fund with about 20 million shares, according to quarterly regulatory filing.

Reporting By Katya Wachtel; Editing by Matthew Goldstein

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