Swiss Misses: Slumping Hedge Funds

USA Today has managed to get its hands on some hedge fund performance data from a Swiss bank, and it isn’t pretty.

USA Today has managed to get its hands on some hedge fund performance data from a Swiss bank, and it isn’t pretty. According to the data, which the paper says the bank compiles each week for its customers, one-fifth of the 650 hedge funds providing the figures are performing in negative territory so far this year. Worst among the lot are those hedge funds that invest in Japanese stocks, with 31 of 40 - more than 75% -- in the red. Among the big losers is Whitney Japan Select Fund, which is at -30%. The worst performer among all the 650 funds, according to the bank, is Tontine Overseas A, which invests in small and midsize U.S. stocks and has lost 32% as of Sept. 6. Another five funds have dropped more than 20%. The report from the bank - which told USA Today it wanted to remain anonymous lest it be accused of violating regulations barring the marketing of hedge funds to unqualified investors (the report came to the paper through an individual not associated with the bank), seems to support the oft-stated assertion that not all hedgies are brilliant stock pickers. “There are 8,000 rocket scientists out there proclaiming their ability to outperform the market,” Andy Kramer of Kramer Capital Management told USA Today. “But history tells me all 8,000 won’t be able to.” One more little tidbit: 55% of the 650 funds tracked by the bank are closed to new investors.