It took a while to get all the numbers crunched, but the first year’s results from the Long Bet with the highest prize are in. Over a year ago Warren Buffet challenged the managers of several funds-of-funds to outperform the S&P 500 over a 10 year period. A one million dollar charitable donation is on the line and so far Buffet’s opponents, Protege Partners, are doing less bad. Carol Loomis, author of the original story on the contest, gives us the details:

Remember “Buffett’s Big Bet” (see fortune.com), in which the noted

investor and Ceo of Berkshire Hathaway maintained that an S&P 500 index

fund would outperform five funds-of-hedge-funds over 10 years? Well, the

results for the first lap, the ago-nizing year of 2008, are finally in,

and the funds-of-funds soundly whipped the index. Vanguard’s S&P 500

Admiral shares, the index fund “bought” by Buffett, were down 37.02%. on

the average, and net of all fees, costs, and expenses, the five

funds-of-funds backed by Buffett’s opponent, Protégé Partners llC, a new

York money-management firm, delivered –23.9%.

Considering that hedge funds can and do sell short, and that they are

not limited to investing in stocks, Protégé’s victory in a bear market

year like 2008 was not surprising to anyone involved in the bet. Ted

Seides, the Protégé partner who engineered the bet with Buffett, says

that until September of that year the five funds-of-funds were in fact

doing well enough that they still anticipated achieving the up year that

hedge fund seek to deliver, even in difficult markets. “But when markets

failed in the aftermath of the Lehman bankruptcy,” says Seides, “the

funds couldn’t avoid the storm.”

Which funds are these, you ask? The bet stipulates that their identities

would not be disclosed. Buffett, however, knows their names and has seen

their audited results. About his trailing position, he says, “I just

hope that Aesop was right when he envisioned the tortoise overtaking the

hare.”

The reader will note that we said the results of the bet are “finally”

in, and therein lies a little story. originally, the thought was that an

update on the bet would be announced each year at Berkshire’s annual

meeting, held in late spring. But the five funds-of-funds did not have

audited financial statements at that time, which made Buffett unwilling

to announce results. only in late october, when the last of the five

funds finally delivered its audited figures to Protégé, were complete

results known. They were very close to what Protégé had earlier

estimated they would be, so it is likely that next year Buffett will

indeed announce 2009 “approximate” results at Berkshire’s meeting in the

spring.

The author of this article is both a friend of Buffett’s and the editor

of his chairman’s letter in the Berkshire Hathaway annual report.