Hedge Fund Performance, 2007

Although they took in almost $195 billion in new money, many and perhaps most hedge funds struggled last year. Average reported return: about 10%.

A lot of mutual funds, and not a few private investors, did much better. What's more, many hedgers don't report their returns, so the actual median return may well be less than 10%.

On the other hand, The Wall Street Journal reports John Paulson bet against subprime mortgages so skillfully that two of his hedge funds recorded 2007 returns of 350% and (yes!) 590%.

For that achievement Mr. Paulson made some $3 billion last year. As comments to this Wealth Report posting indicate, not everybody's sure he earned it.