With the recent economic crisis we have seen many hedge funds fail due to being over leveraged while the financial markets have dropped.
Hedge Funds that can do better in these bear markets are market neutral funds. These funds hold an almost even position of long and short positions. They are less effected by volatility in the market, as a loss on a long position will be offset from a gain in a short position.
Still many market neutral funds were in the red and did not meet their performance benchmark of the cash rate.