Bloomberg News reported this morning that hedge funds as a whole had another awful year. (I had actually tweeted about this late last week) While the S&P 500 had a total return of about 30% during 2013, hedge funds limped in at about 7% (see chart above).

To make matters worse, hedge funds as a whole have had a dismal record since the global credit crisis and Great Recession of 2008. Up to that point, good performance and a market blitz by the hedge fund industry seduced a lot of capital to invest. It was hard for many to resist the siren call of having a chance to invest with a group of “geniuses” that had bolted from their previous employ as mutual fund managers or desk traders to form their own firms.

However, the tide as long since receded, revealing the true legitimacy of a lot of the industry’s talent and trading strategies. Excessive fees, once overlooked as hedge funds had a good early run, are now the topic of constant examination.

Now, it is true that there are a number of excellent hedge fund managers still in business (as there were before hedge fund investing started to become a fad in the later 1990’s), but their success and skill is drowned out when looking after the various hedge fund indices that include a broad array of participants. However, trying to isolate these excellent managers is a bit like looking for a needle in a haystack.

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