Not Too Fun(d), but Not Too Shabby

From the NY Post via Big Picture:

New York's Top 100 Hedge Funds are getting flattened in the credit crunch.

At first glance it appears that statement is pretty accurate. I will agree these fund managers have a lot of work to do in order to get their funds back to black before bonus time. However, with the S&P 500 down 12.65% YTD through July and the average Hedge Fund listed by the NY Post down -2.78%, I'd say they "haven't done horribly".

Looking at cumulative returns since the beginning of 2007, the "haven't done horribly" becomes "have done quite well". The problem is many of these funds sold their returns as absolute return alpha strategies and as many are figuring out, it was likely beta the whole time.