BOSTON (TheStreet) -- Hedge fund billionaire John Paulson apologized to investors for what he called a year that has been "the worst in the firm's 17-year history," according to a news report.
"We are disappointed and apologize," he told his investors, CNBC said, citing a copy of Paulson & Co.'s third-quarter letter to investors.
John Paulson (Paulson & Co.)
Paulson's flagship Advantage Fund Plus was down 45% through the end of the third quarter, while his Advantage Plus Fund, which seeks to profit from corporate events such as takeovers and bankruptcies, was down 33%, according to the report.
Paulson's letter to investors said that "macro fear is the driving force behind the markets" rather than fundamentals, citing such factors as the European debt crisis.
Hedge funds as a group are getting hammered this year, losing on average 4% through the end of September.
"At the beginning of the year, we positioned our portfolios with net equity exposure appropriate for growth in the U.S. and an orderly resolution of Europe's sovereign credit issues," CNBC quoted him as saying.
"However, as the year progressed, our assumptions proved overly optimistic and our net equity exposure was too great. Growth in the U.S. slowed and European leaders were, as yet, unable to deal with the escalating sovereign debt crisis," Paulson said.
The report says the biggest fund lost big on investments in financial-services giants such as
Bank of America
Paulson & Co., based in New York, manages about $30 billion.
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