John Paulson has gotten smoked 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.

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