John Paulson, the billionaire who has been betting on a U.S. economic recovery, lost 6.9% in June in his Advantage Plus hedge fund to bring his first-half decline to 8.8%, investors said.
The Standard & Poor's 500 Index of U.S. stocks has tumbled 13% from the end of April through June 30, hurting performance. Mr. Paulson's Advantage and Advantage Plus funds were positioned to profit from a jump in stocks including financial-services companies, said two clients briefed on the returns, who asked not to be named because the fund is private.
Mr. Paulson, who runs the $33 billion New York-based Paulson & Co., hasn't changed his bullish views after the stock market's decline and last week's data showing weaker-than-expected private-sector employment in June, according to the investors.
Almost two-thirds of the firm's assets are in his Advantage funds, which invest in corporate events such as bankruptcies and mergers. The Advantage fund dropped 4.4% in June and 5.8% in the first half, the investors said.
Armel Leslie, a spokesman for the fund firm, declined to comment.
Paulson & Co. raised its stakes in financial companies in the first quarter by 6.5%, according to regulatory filings.