Highland Capital is closing two of its hedge funds. Highland has one of the best reputations and track records in the credit analysis field, but this market has brutalized even the most intelligent of operators (via WSJ):

NEW YORK — Highland Capital Management LP is closing two of its five hedge funds, according to a person with knowledge of the firm.

The two funds, Highland Credit Strategies Fund and Highland Crusader Fund, had combined assets of about $1.5 billion, said the person.

The Crusader Fund once managed $3 billion in distressed situations, but that has dwindled to about $1 billion, the person said.

Mark-to-market losses, as well as “some redemptions,” are the reasons Highland decided to close the funds. The liquidation of the funds will be done over a three-year period.

Why is this good news? If the smartest guys in the room are being carried out, the bottom must be near. Who is left to sell?