Hedge fund manager John Paulson lost more than half of his capital in one of his biggest funds, people familiar with the number said Friday.
His Advantage Plus fund, which was the firm's worst performer through 2011, ended the year down roughly 52 percent. In 2010 that portfolio ended up 17 percent.
The Standard and Poor's 500 stock index ended 2011 flat.
A spokesman for Paulson's firm, Paulson & Co, declined to comment on the fund's performance.
Paulson is one of the biggest stars of the $2 trillion dollar hedge fund industry, having made his fame on prescient bets on the subprime mortgage crisis and, more recently, gold.
But 2011 was not kind to the billionaire stockpicker, who bet big on a U.S. economic recovery that never arrived. As the U.S. economy stagnated, the sovereign debt crisis in Europe sent global financial markets into a tailspin in the second half of the year.
Paulson funds sustained significant losses on investments in Bank of America , Hewlett Packard , Hartford Financial Services and Sino-Forest .
Even gold, which had contributed to stellar returns for Paulson & Co investors in previous years, did not offset losses, as the once safe-haven commodity sank further through 2011. At the end of the third quarter, Paulson was the largest shareholder of the SPDR Gold Trust exchange-traded fund with about 20 million shares, according to quarterly regulatory filing.
The average hedge fund was down about 4.5 percent for the year, according to eVestment/HFN, which tracks the performance of about 4,000 funds through its HFN Hedge Fund Aggregate Index. That figure may drift lower as more funds report their final performance, eVestment said.
(Reporting By Katya Wachtel; Editing by Svea Herbst-Bayliss, Gary Hill)