When it comes to hedge fund performance monitoring, survivor bias has long been an issue, as it has with mutual find performance monitoring. At a time when lots of funds are shutting down, the problem is worth noting.

Many fund managers are shutting down their old, returns-challenged funds and opening new ones, reports the New York Times. Call it a mass do-over or a collective mulligan.

Managers in this category include James Pallotta, Gabe Nechamkin and even John Meriwether of Long-Term Capital Management fame, who is working on his third fund.

This may strike some as a way to magically wipe the slate clean, a chance to start over. That's true in some respects. But for those who are asking old investors to put money into new funds, some are finding they have to make good on previous losses before they can take a performance fee--which makes sense.

For a hedge fund manager looking for a fresh start, it may be better to seek a new crop of limited partners. They'll still have to explain their performance problems. It might come down to their track record before the crisis set in.

For more:
- here's the article

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