Apparently what goes up can come down. While little noted in the press, aside from actual fraud, hedge funds can close just as easily as they open. Henny Sender in the Wall Street Journal reports that hedge fund investors are eyeing critically the performance of their hedge fund investments.

The hedge-fund industry has entered a turbulent phase. The amount of money flowing in has dropped to about half the level of last year. Much of the money comes through investment firms specializing in funds that pool money and allocate it among several hedge funds for a fee. These so-called funds-of-funds firms account for as much as 40% of all inflows.

However, they are much more likely to quickly pull their money out of an underperforming hedge fund; today funds of funds are seeing substantial withdrawals, according to Bradley Ziff, head of the hedge-fund practice at consultants Mercer Oliver Wyman.

In as diverse an industry as hedge funds there are of course many funds that are doing welll and compensating their managers handsomely. However, generating alpha is neither cheap nor easy. Even those that are able to generate high returns do not do so without some stress.

Riva D. Atlas at the New York Times notes that running a hedge fund is not all that is cracked up to be. After reading Barton Biggs new book, “Hedge Hogging” there are apparently alot of stressed out hedge fund managers out there. The book also serves as a bit of a memoir recounting the hoops he needed to jump through to launch his new hedge fund venture. Not all hedge funds end up as winners.

Mr. Biggs describes the Darwinian process under which thousands of hedge funds start, and then swiftly disappear, every year.

“If the fund does well, the partners earn the 20 percent, get more money and wear smiles to bed,” he writes. “If they really blow it in the first year, everybody redeems their money and they’re gone with barely a ripple.”

One group of hedge fund mangers who are not stressed out this year are the handful of managers at the Harvard Management Company. According to John Hechinger at the Wall Street Journal their pay is provoking yet more criticism. The combination of the high pay and the “too low” payout from the endowment have put Harvard under the microscope. It will be interesting to see what, if any, changes occur under the new chief of the endowment fund.