The best and worst of Wall Street 2011: Hedge Funds by Scott Cendrowski @FortuneMagazine December 12, 2011, 10:16 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons It’s been a brutal year for hedge funds, and some former stars are stepping down. The super-secretive Bruce Kovner is retiring after 28 years atop $10 billion Caxton Associates; billionaires George Soros and Carl Icahn are returning outsiders’ money; and the once-exalted Goldman Sachs GS Global Alpha fund was shuttered this fall. “It’s a changing of the guard,” says Emma Sugarman, global head of capital introductions at BNP Paribas. No wonder investors are fleeing many funds: Through October, the broad Hennessee Hedge Fund Index was down 2.95% for the year, while the Standard & Poor’s 500 index (SPX) gained 1.3%. (You’d pull your money too.) Still, a few portfolio managers were able to shine. –Scott Cendrowski Soros, Hintze WINNERSAlbert Friedberg Friedberg Global Macro Up 54%Albert Friedberg hardly conjures up the modern-day hedge fund manager — he’s 65 and works from small offices in Toronto, not Greenwich, Conn., or Midtown Manhattan. But he’s been trading commodities dating back to the early 1970s, and since opening his Global Macro Fund in 2001, he has posted 19% average annual returns. This year Friedberg wagered that hot stock markets in Brazil and India would fall, European banks would crash harder than industrial stocks, and inflation-protected U.S. Treasuries would continue their rise (a trade he’s continuing to ride). His current investment thesis is a scary proposition: Europe is headed for a massive credit implosion, after which the world falls into a global depression. If Europe can’t get its act together, he puts those odds at more than 50%.Chase Coleman Tiger Global Up 40%Coleman’s partners are affectionately known as “assassins” for their stealthy tech investments. Early stakes in Facebook and LinkedIn lnkd won praise for the press-shy 36-year-old, and in 2011, Tiger Global benefited from huge positions in Apple AAPL and Russian tech company Yandex YNDX .John Thaler JAT Capital Up 31%Hot money poured into JAT Capital this year, tripling its assets to some $3 billion. Thaler, a former bank analyst who founded JAT in 2007, posted huge returns with short positions in Chinese Internet companies and by going long on travel stocks like Priceline.com PCLN and Wynn Resorts WYNN .LOSERSJohn Paulson Paulson Advantage Plus Down 47%A few years after earning billions shorting subprime-backed securities, Paulson’s largest fund is in the dumps. His bet on a U.S. recovery was off, dooming stakes in Citigroup C , Bank of America BAC , and SunTrust Banks STI . Still, Paulson remains upbeat, telling investors that stocks remain cheap and that the economy will improve by the end of 2012.Crispin Odey Odey European Inc Euro Down 22%One of London’s biggest hedge funds had one of its worst years on record. Led by Crispin Odey, who was once married to Rupert Murdoch’s oldest daughter, the fund was burned by European banks anticipating a recovery that never came.Michael Hintze CQS Directional Opportunities Down 20%This summer’s selloff in European bank stocks and bonds hammered the flagship fund at billionaire Michael Hintze’s London firm.Note: All returns through 9/30/11. Sources: Hennessee Group, BloombergThe best and worst of Wall Street 2011 CEOs Venture capital and private equity Analysts Economists Hedge funds Dealmakers Traders Mutual funds This article is from the December 26, 2011 issue of Fortune.