Poor performance by in-house hedge funds launched by investment banks and the like may lead some big Wall Street names to exit the field, Dow Jones reports. While many a top hedge fund enjoyed returns that outperformed the standard indices, a number of in-house HF offerings by the likes of Goldman Sachs, Bear Stearns and Barclays have not. The last time banks tried to succeed out of their bailiwick –namely in mutual funds – and struggled, they left, most notably Merrill Lynch and Citigroup. And if their bottom lines have been soundly beaten, they just may end up selling the troubled units. “If they’ve got to repay their balance sheets, it seems to me they need to,” Ferenc Sanderson of Lipper told Dow Jones. Some won’t be surprised if that happens. “We’ve always been a little bit negative on the big banks because of their fee structures and talent pool and bureaucracy,” Charles Gradante of Hennessee Group said in a DJ interview. While poor performance at in-house funds is viewed as “an historical trend,” according to David Gold of Watson Wyatt Worldwide, others believe that a big bank in-house hedge fund could do well with some adjustments, like making the HF unit independent of the bank, such as Bank of New York Mellon. “We take ourselves as some proof this can work,” says Bill Crerend, who runs its EACM fund of hedge funds. Of course, BNY Mellon also suffered losses at two hedge funds, and while the bank won’t talk about it in detail, it did tell Dow Jones that those HFs were part of a $38 billion pool that was hit hard by poorly timed economic bets.