Rewarding the Losers

Most Wall Street bankers will end the year with a lot less padding in their pockets, and few investors are shedding any tears over that fact.

But other losers in money management are being rewarded on this Freaky Friday in December.

Harvard University announced that the annual pay for its top six endowment money managers totaled $26.8 million this year, up 15 percent from last year. The university claims it's a reward for the endowment's strong performance during the year that ended June 30. Harvard's investments returned nearly nine percent while the S&P 500 lost 13 percent.

It's impressive, but what happened after June 30? Oh, that's right. Earlier this month, Harvard said it had lost 22 percent of its endowment since July 1, underperforming even its biggest rival, Yale, which saw its investments fall by 13 percent.

Ready for another double take? Legg Mason announced that it appointed Bill Miller to help oversee a third fund in an attempt to stem customer redemptions from its mutual funds, according to Bloomberg.

Miller, you'll recall, was a star value manager who beat the performance of the S&P 500 index for 15 consecutive years until 2006. This year, Miller's performance has been consistently dismal as he snapped up more and more shares of financial stocks like AIG and Wachovia as they plummeted further and further.

His Legg Mason Value Trust has fallen by 56 percent so far this year. His Legg Mason Opportunity trust has declined by a whopping 65 percent year-to-date.

And beginning January 1, Miller will add his magic touch to the Legg Mason Partners All Cap Fund.

by Megan Barnett