Paulson Pummeled In Early June, Advantage Plus Down 20% YTD

Jun 17 2011 | 8:26am ET

For the second-straight time, Paulson & Co. has taken a big hit in the early days of a month. The only difference is, June's decline was much, much worse than May's.

The New York-based firm's flagship Advantage Plus Fund dropped more than 13% through June 10, The Wall Street Journal reports. The $9 billion flagship is now down 19.65% on the year.

Another Paulson fund, Enhanced Partners, previously a bright spot for the firm during a tough 2011, fell 7% in early June, cutting its year-to-date gains to under 4%.

The $38 billion firm was one of many hit hard by early May's volatility in the commodities market. But its June swoon appears to be very much a solo affair.

Paulson has been battered by its banking investments—as have other hedge funds. Bank of America and Citigroup, two of the firm's largest holdings, have lost 21% and 14% this quarter, respectively. But no other hedge fund had as big a stake in Sino-Forest Corp., the timber company accused of questionable accounting earlier this month.

Sino-Forest shares have lost 80%—and Paulson owned more than 14% of those shares. The precipitous drop has left Paulson with paper losses in excess of $500 million.

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    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…