Hedge fund manager John Paulson lost more money in September thanks to ill-timed bets on an elusive economic recovery that left one of his biggest funds off 47 percent, two people who saw the numbers said on Saturday.

Paulson & Co, one of the world's five biggest hedge funds, released the numbers to investors late on Friday just hours before many on Wall Street headed off for a holiday weekend.

The Advantage Plus fund, which uses some borrowed money to help boost returns, tumbled 19.35 percent last month, leaving it off 46.73 percent for the year, the firm told clients.

A spokesman for Paulson did not immediately respond to a request for comment on Saturday.

September's double digit drop at Paulson ensures him a spot as one of the industry's very biggest losers this year. While many other fund managers, including Lee Ainslie and Leon Cooperman, are also nursing losses, none are as dramatic as the Paulson drop, investors said. The average hedge fund lost 2.81 percent last month and is now off 4.74 percent for the year, according to data from Hedge Fund Research.

Speculation had mounted all week that Paulson's September losses would be large as stocks tumbled again last month. But these numbers still packed a punch, several people said.

The Paulson numbers were first reported on Friday evening by Absolute Return Magazine.

Early next week the billionaire hedge fund manager, who shot to fame and fortune thanks to his savvy bet against the subprime housing market, is scheduled to explain what went wrong in a conference call to investors on Tuesday.

But several people who have money with him scoffed at the idea that a manager who seemingly could do no wrong for years will now try to explain away his career's biggest loss.

I don't think I need to listen to his excuses, it would be like rubbing salt in the wounds, said one disgruntled client, who asked not to be named because he is not permitted to discuss the private fund's returns in public.

Time is now ticking for Paulson as his investors have less than one month left to decide whether to pull their money out of the Advantage Funds -- the firm's biggest -- by the October 31 notice deadline.

TO STAY OR TO GO

A decision about whether to get out might be tricky, several investors have said. Some clients, particularly those who got in only recently through big banks' wealth management platforms, might be willing to hang on for a little longer, reasoning that Paulson, who had so many winning years before, is bound to recover. Last year the Advantage Plus fund gained 18 percent.

But others argue that the manager, who is widely liked in the industry and often described as a modest and thoughtful man, has lost his magic touch.

Bets on big bank stocks like Bank of America turned against him, and now even his call on gold, which had paid off handsomely last year, appeared to be off, these people said.

Paulson's gold fund, which includes the metal and mining companies, lost 16.35 percent last month and trimmed its year-to-date gain to 1.34 percent.

(Editing by Eric Beech)

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