Hedge Funds' World of Hurt

"It takes 12 to 18 months to bring in new capital, so if you can figure out a way to keep the capital on board, you're better off retaining investors if you can do so," Weddle adds.

To be sure, quant funds similar to Goldman's, which employ computers to identify inefficiencies in the market, all have been suffering. The tumult that has resulted from the credit squeeze has roiled many fund managers strapped for cash due to margin calls.

What the future holds for hedge funds is uncertain. Certainly the best-of-breed firms such as Goldman and others will continue to garner investor dollars, but smaller names and start-ups likely will face challenges.

Geoffrey Tudisco, CEO of small prime brokerage firm VanthedgePoint Group, says anecdotally he has seen some slowdown in new funds, but he declined to speculate as to whether there'd be a lasting effect on the hedge fund industry.

"Summer is usually slow, but this summer is slower," he comments. "Most investors are doing damage assessment."

Institutional investors, who have only recently begun to pour more money into alternative investment vehicles, may be the first to become gun-shy after the smoke clears -- though for now, many investors say that they have emerged largely unscathed.