John Paulson has gotten smoked the past two months

Reuters

John Paulson.

Some of John Paulson's funds have been wiped out in the past two months.

Bloomberg News' Katherine Burton and Simone Foxman report that the Paulson's flagship merger-arbitrage fund, Paulson Partners, fell 6% in September and is now up 0.6% for the year.

The Advantage fund, which seeks to profit from company spinoffs, takeovers, and bankruptcies, fell 8.5% last month and is now down 12% for the year, the report said.

Those funds both got crushed in August during a period of market volatility.

Paulson, who became famous for his 2007 bet against subprime mortgages, had his second-worst performance ever last year, with his Advantage Plus fund falling 36% and his Advantage fund falling 29%. In 2014, Paulson Partners ended the year up 0.8%, while the Enhanced fund fell 1.6%.

Paulson isn't alone. There are a number of big-name hedge fund titans that will be racing to rescue the remainder of the year.