The average hedge fund lost 0.75 percent in the first half of the year. Some were quick to point out that the decline marked the worst first-half performance since the 1990s. But Breakingviews notes that the Standard & Poor's 500 has fallen 13 percent since the first of the year. Compared to that, hedge funds have performed mightily, so it's fair to say that the first-half loss will not prompt a lot of soul-searching among investors. If anything, institutions want to allocate more to hedge funds. That said, big losses in specific funds will leave a sour taste in many a mouth. My guess is that the big winners that will emerge from all of this are the funds of funds that show real fund-picking acumen.   

For more:
- here's a Breakingviews article

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